During the colonial period India became an:

Exporter of primary goods and raw materials and consumer of finished goods

The correct answer is option (2) - Exporter of primary goods and raw materials and consumer of finished goods

Flows pertaining to the movement of capital, commodities, ideas and people go back several centuries in Indian history. During the colonial period, as a consequence of Britain’s imperial ambitions, India became an exporter of primary goods and raw materials and a consumer of finished goods. After independence, because of this experience with the British, we decided to make things ourselves rather than relying on others. We also decided not to allow others to export to us so that our own producers could learn to make things. This ‘protectionism’ generated its own problems. While some advances were made in certain arenas, critical sectors such as health, housing and primary education did not receive the attention they deserved. India had a fairly sluggish rate of economic growth. In 1991, responding to a financial crisis and to the desire for higher rates of economic growth, India embarked on a programme of economic reforms that has sought increasingly to de-regulate various sectors including trade and foreign investment.