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TRADE policy:
We are now in a position to sum up our analysis of India's trade policy. First, India's trade policy has always been very intricately related to India's basic development goals of achieving high rate of GDP growth and the removal of poverty. Since India was specialized in primary production and therefore exports of primary products during the early years of our planning for industrialization, India followed a very restrictive import control regime since the second five year plan. Such policies had resulted in a very slow growth in output and India's share in the world trade has been continuously declining. There was however increasing realization of the fact that protectionist policies had led to growing industrial inefficiency resulting in slow growth performance. The economic crisis of 199 1 and the remarkable economic performance of the East Asian countries and the Chinese economy, which have followed vigorous export oriented strategy of growth by liberalizing their economies compelled Indian policy makers to initiate fundamental reform measures in India also. India has liberalized its economy in many dimensions and particularly it has liberalized its trading sector by eliminating all quotas and also progressively reducing the tariffs. These measures have resulted in higher growth performance and rapid transformation of the economy.
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