Q. 305.0( 3 Votes )
What is liberaliz
1. Removal of barriers or restrictions set up by the government is known as the process of liberalisation. The Indian government after independence had put barriers to foreign trade and foreign investment. However, these barriers were removed in 1991 which eventually brought wide-ranging changes in the Indian economy.
These changes are as follows –
2. The removal of trade barriers brought in new opportunities for the import-export purpose. Goods could now be imported as well as exported easily as compared to the previous phase.
3. Foreign companies were allowed to invest in setting up offices and factories in India thus bringing foreign products and services in the domestic markets of India.
4. The liberalization of trade and businesses were now allowed to make their decisions freely. They could decide upon the products to be imported or exported as government liberalized its rules and regulations.
5. On an overall basis, the government now imposes much fewer restrictions than were put immediately after independence and is therefore said to be more liberal in nature.
NOTE - Liberalisation of foreign trade and investment, in basic terms, refers to the removal of barriers i.e. economic barriers protecting the domestic producers from the foreign producers. The policy of restrictions on trade and investment was adopted by the leaders at the time of independence in order to protect the domestic producers from foreign competition. Moreover, economically and financially, the Indian economy was suffering from the impact of British rule which first required the development of India and its economy.
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