Question

Why is tax on imports known as a trade barrier?

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Answer 1

Explanation:

Tax on imports imposed by the government to regulate foreign trade and investment is known as a trade barrier.

Government imposed barriers on foreign trade and investment for the following reasons :

(i) The competition from importers would have crippled the new-born industries of India.

(ii) To protect the producers within the country from foreign competition.

(iii) Imports of only such commodities were allowed which were