Answer:
(i)
After Independence, the Indian government had put up barriers to foreign trade
and foreign investment. This was considered necessary to protect the domestic
producers from foreign competitors.
(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.
However, around 1991, some far-reaching changes in policy
were made by Indian government.
(i) The government decided that the time had come for
Indian producers to compete with producers around the globe.
(ii) It was felt that competition would improve the
performance of domestic producers 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.
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