CBSE 2025, Set 2

Question

(a) "The trade and investment policy initiative by the Indian Government during 1991 economic reforms involved some major decision making with respect to local industries."
Elaborate any two major decisions and their respective impacts on the Indian economy.

Edvaya · Accepted Answer

The correct answer is Subjective. The trade and investment policy reforms initiated by the Indian Government during 1991 aimed at: 1. **Dismantling the structure of quantitative restrictions:** Quotas on imports were largely removed. 2. **Reduction of tariff rates:** Heavy taxes on imported goods were significantly lowered. **Impacts:** Liberalisation of this policy led to an increase in the competitive position of Indian goods in the international markets. It exposed local industries to global standards, forcing them to become more efficient. Furthermore, it resulted in a massive inflow of foreign investments (FDI) and advanced technology into the Indian economy.

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Economics > Indian Economic Development > Economic Reforms 1991

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