India changed its economic policies in 1991 due to a financial crisis and pressure from international organisations like the World Bank and IMF.

The service sector registered growth during the reforms.

Major external reforms included foreign exchange, degradation and import liberalisation.

Licenses are still necessray for the following six industries:

(i) Alcohol, (ii) Cigarettes, (iii) Hazardous Chemicals, (iv) Industrial Explosives, (v) Electronics, (vi) Aerospace and drugs.