Question

what was need for removing
barrier or restrictions to foreign trade and investments? explain✨✨✨✨​

Answer 1

Explanation:

. 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.

NOTE – The Indian government, immediately after independence, had put barriers on foreign trade and investment in India in order to protect the producers within India from foreign competition. This was done to provide the Indian producers with an opportunity to grow and expand their industries.

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Answer 2

In New Economic Policy in 1991, the government wished to remove these barriers because it felt that domestic producers were ready to compete with foreign industries.

Explanation:

• Features of New Economic Policis are : i) Liberalisation ii) Privatisation, iii) Globalisation of the Economy  iv) New Public Sector Policy v) Modernisation vi) Financial Reforms and vii) Fiscal Reforms.
• These seven are comes under the Economic Reforms in India.
• In Indian Government felt that foreign competition would improve the quality of goods produced by Indian industries.
• The most common barrier to trade is a tariff—a tax on imports.
• Tariffs raise the price of imported goods relative to domestic goods .
• Domestic goods means product produced at home country.

To Learn More...

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

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2.What do you understand by term globalisation ?prove with examples that it existed from pre modern time ?

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