Question
'The Indian government, after independence has put many such barriers on foreign trade and foreign investment'. Explain.
Solution
The Indian government, after Independence, had put barriers to foreign trade and foreign investment.
(i)This was considered necessary to protect the producers within the country from foreign competition.
(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. Note that all developed countries, during the early stages of development, have given protection to domestic producers through a variety of means.
(i)This was considered necessary to protect the producers within the country from foreign competition.
(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. Note that all developed countries, during the early stages of development, have given protection to domestic producers through a variety of means.
