18.Why is ‘tax’ on imports known as trade barrier? Why did the Indian government impose barriers on foreign trade and foreign investments after independence? Give three reasons.
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Answered by
78
Tax on imports goods known as trade barriers because restriction has been set up for import goods from foreign companies by the government .
The Indian government impose trade and foreign investments after independence because of following reasons ;
● To protect the producers within the country from foreign competition .
● Industries were coming in 1950 & 1960s and competition from imports goods at that stage were not allowed industries were come up.
● Indian producers were not capable to compete with producers around the globe.
The Indian government impose trade and foreign investments after independence because of following reasons ;
● To protect the producers within the country from foreign competition .
● Industries were coming in 1950 & 1960s and competition from imports goods at that stage were not allowed industries were come up.
● Indian producers were not capable to compete with producers around the globe.
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Answer
TAX on import is known as a trade barrier, because some restriction has been set up. The government can use a trade barrier to increase or decrease foreign trade and to decide what kinds of goods and how much of each should come into the country.
The Indian government after independence had put barriers to foreign trade and foreign investment.
This was considered necessary to protect the producers -within the country from foreign competition.
Industries were just coming up in the 1950s and 1960s.
Competition from imports at that stage would not have allowed these industries to develop and grow.
India allowed imports of only essential items such as machinery, fertilizers, petroleum etc.
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