Liberation of trade and investment regime was initiated in the Indian Economy in 1991 to provide for:

1. International competitiveness of industrial production.
2. Promotion of competitiveness of local industries.
3. Collection of higher tariffs.
4. Adoption of modern technologies.
5. Control over imports.

Choose the correct answer from the options given below:

A, B and D

Liberalisation of trade and investment regime was initiated to increase international competitiveness of industrial production and also foreign investments and technology into the economy. The aim was also to promote the efficiency of local industries and adoption of modern technologies. 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, the trade policy aimed at: dismantling of quantitative restrictions on imports and exports, reduction of tariff rates and removal of licensing procedures for imports. Import licensing was abolished except in case of hazardous and environmentally sensitive industries. Quantitative restrictions on imports of manufactured consumer goods and agricultural products were also fully removed from April 2001. Export duties have been removed to increase the competitive position of Indian goods in the international markets.