After independence, why did India follow a regime of quantitative restrictions on imports?
Answer & explanation
Correct answer: option 1
In order to protect domestic industries, India was following a regime of quantitative restrictions on imports. This was encouraged through tight control over imports and by keeping the tariffs very high. These policies reduced efficiency and competitiveness which led to slow growth of the manufacturing sector. Thus, in order to ease out the restrictions trade and investment policy reforms were introduced in 1991 to boost the manufacturing sector and increase the efficiency of the domestic industry.