question_answer

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

Answer:

Reason behind putting barriers to foreign trade and foreign investment by the Indian government in 1950s and 1960s was to protect the producers within the country from foreign competition. At this stage competition from imports would have hampered the growth of industries.

Around 1991, government felt that it was the proper time for Indian produce to face competition and improve quality of products in comparison to produces around the globe. It was welcomed by the world business community and it has attracted a huge amount of foreign investment which is crucial for the overall development of the country.