What is a trade barrier? Why did the Indian Government put up trade
barriers after Independence? Explain.
Tax on imports is an example of trade barrier. India had earlier imposed trade barriers because it had to protect its own industries. Starting around 1991, some far- reaching changes in policy were made in India. The government decided to dive in for liberalisation policy. It felt that competition would improve the performance of producers within the country since they would have to improve their quality. This decision was supported by powerful international organisations. Thus, barriers on foreign trade and foreign investment were removed to a large extent. .