Question

Barriers on foreign trade and foreign investment were

removed to a large extent in India since 1991’. Justify

the statement​

Answer 1

QuestioN :

Barriers on foreign trade and foreign investment were  removed to a large extent in India since 1991’. Justify  the statement​

ANswer :

1. The government decided to remove the barriers on foreign trade and foreign investment around 1991 as it was realized that the time had come for Indian producers to compete with producers around the globe.

2. The removal of barriers meant that goods could be imported as well as exported easily and also foreign companies could set up their factories and offices in India. In addition, the government imposed much fewer restrictions of business activity within India who was allowed to take decisions freely.

3. It was also felt that competition would improve the performance of the producers within India as they would have to improve their quality of service in comparison to the foreign competition.

Answer 2

The barriers were removed in 1991 as a result of economic competition.

• In the year 1991, when it was typically realized that the time had approached for Indian producers to compete with producers globally, the government decided to eliminate the obstacles to international trade and foreign investment.
• The gradual elimination of potential barriers led to easy import and chief export of commodities and the economic development of office premises of foreign enterprises in India.
• Moreover, in India, the government placed lesser restrictions on business operations that had decisions liberty.
• It was equally considered that competition would increase the output of producers within India because opposed to international competition, they would have to progressively improve their service standard.