Question

What was the reason for putting barriers to foreign trade and foreign investment by the Indian government? Why did it wish to remove these barriers?

Answer 1

Post-independence India put barriers on its foreign trade as the imports had exceeded exports and the country was in a huge debt. To reverse the debt and improve the country’s financial condition the government decided to minimize its imports and foreign investment and maximize exports.

 In the recent past the government decided to remove these barriers so that the local producers improve their quality of products and match the international standards. 

Answer 2

ANSWER:

• The Indian government after independence had put up barriers to foreign trade and foreign investment. This was considered necessary to protect the producers within the country from foreign countries.

• Industries were just coming up in the 1950s and 1960s and competition from imports at that stage would not have allowed these industries to come up.

• Thus, India allowed imports of only essential items such as machinery, fertilisers, petroleum, etc.