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?

Barriers to foreign trade and foreign investment were put by the Indian government to protect domestic producers from foreign competition, especially when industries had just begun to come up in the 1950s and 1960s. At this time, competition from imports would have been a death blow to growing industries. Hence, India allowed imports of only essential goods. Later, in the 1990s,the governmentwished to remove these barriers becauseit felt that domestic producers were ready to compete with foreign industries. It felt that foreign competition would in fact improve the quality of goods produced by Indian industries. This decision was also supported by powerful international organisations.

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The Indian government had put barriers to foreign trade andforeign investmentto protect domestic producers from foreign competition,especially when industries had just begun to come up in the 1950s and 1960s. Atthis time, competition from imports would have been a death blow to growingindustries. Hence, India allowed imports of essential goods only. In New Economic Policy in 1991,the government wishedto remove these barriers because it felt that domestic producers were ready tocompete with foreign industries. It felt that foreign competition would in factimprove the quality of goods produced by Indian industries. This decision wasalso supported by powerful international organisations.

Barriers to foreign trade and foreign investment were put by the Indian government to protect domestic producers from foreign competition, especially when industries had just begun to come up in the 1950s and 1960s. At this time, competition from imports would have been a death blow to growing industries. Hence, India allowed imports of only essential goods. Later, in the 1990s, the government wished to remove these barriers because it felt that domestic producers were ready to compete with foreign industries. It felt that foreign competition would in fact improve the quality of goods produced by Indian industries. This decision was also supported by powerful international organisations.

(i) 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. (ii) 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. (iii) Thus, India allowed imports of only essential items such as machinery, fertilisers, petroleum, etc. Starting around 1991, some far-reaching changes in policy were made in India : ADVERTISEMENTS: (i) The government decided that the time had come for Indian producers to compe with producers around the globe. (ii) It was felt that competition would improve the performance of producers within tl country since they would have to improve their quality. (iii) This decision was supported by powerful international organisations. Thus, barriers on foreign trade and foreign investment were removed to a large extent