Question

As a result of the foreign trade reforms ________.

• A. the number of import licenses has increased.
• B. only a few types of goods and services can now be exchanged freely.
• C. EPCG scheme has been abolished.
• D. the average tariff rates have been reduced.

Answer 1

Answer: (D)

the average tariff rates have been reduced.

Prior to the 1991 economic liberalisation,India was a closed economy due to the average tariffs exceeding 200 percent and the extensive quantitative restrictions on imports. Foreign investment was strictly restricted to only allow Indian ownership of businesses. Since the liberalisation, India's economy has improved mainly due to increased foreign trade.