Trade liberalisation
Topic: India's International Trade and Tourism · NCERT: Class 12, Ch 8 "International Trade"
Meaning
Trade liberalisation is the set of reforms India began in 1991 to open up its trade. Imports were allowed more freely, import duties (taxes on imports) were cut and licences were removed. Patents shifted from process patents (protecting a method) to product patents (protecting the product itself). Together with growth in manufacturing and new markets, these steps made India's foreign trade grow very fast.
Example
India's total trade grew from ₹1,214 crore in 1950-51 to ₹77,19,796 crore in 2020-21. That is about 6,359 times larger, and most of this jump came after liberalisation.
Don't confuse with
- Import substitution: the earlier policy of making imported goods at home to save foreign exchange. Liberalisation did the reverse and opened the economy to imports.