Question

Why had the Indian government put barriers to foreign trade and foreign investment after independence. Analyse the reason

Answer 1

Trade barrier means when the government put some restrictions on the trade (mainly international)then the restriction is called trade barrier. Trade barrier is mainly used by developing country. The govt. use it because: When the import from other countries is not restricted it will affect the industries of the country. Eg: The import of machine made goods to India by the East India Comp. As the consumer will get quality good products at cheaper rate,they do not use the goods made in their country. But the Govt. of India removed trade barriers in the year 1991 because: The consumer will get quality goods at low cost. The govt. thought that the time has arrived for the Indian industries to compete in the international market. Moreover International trade will add to the GDP. Pressure from different organisations and countries. So basically govt use trade barriers to earn profit.

Answer 2

Indian government put barriers to foregin trades and investment because:-

1. it was nesessary  to protect the producers from foreign competitions. 

2.india allowed imports only of essential items inorder to give protection to domestic producers. 

3.to maintain or improve the quality of goods after independence