Meaning:
Quantitative restrictions refer to a set of measures for regulating physical quantities and/or values of imports and/or exports. These controls may be limited to a few leading and important items, or they may be extended to the whole range of traded items.
Rationale:
The justification for levying quantitative restrictions arises when market demand and supply forces (even with the use of tariffs and subsidies) fail to achieve the desired changes in the flow of imports and exports.
The main feature of QRs (also termed non-tariff barriers or NTBs) is that they do not depend upon the response of market forces. Instead, the authorities set the targets relating to imports and exports and aim at achieving them through direct use of their executive powers.
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That way, the success of QRs is assured, provided the targets chosen by the authorities are not faulty and the implementing machinery is efficient.
Moreover, QRs have the advantage that they can be revised quickly and effectively to suit the needs of the situation. Subject to international legal commitments, or risk of retaliation by other countries, they can be levied selectively and in as great a detail as need be.
Forms:
QRs can be levied in as great a detail as need be, subject to the limitations of international commitments and possibility of retaliation by other countries.
They can be formulated in financial and/or physical terms. They can be selective as between specific items, origins of imports and destinations of exports, financial dimensions and the like.