Question

How did India protect its domestic producers from international competition till 1991?

• A. By imposing heavy taxes on foreign goods
• B. By restricting the quantity of imports
• C. By abolishing trade barriers
• D. By providing more working capital

Answer 1

Answer: (A), (B)

By restricting the quantity of imports

After independence, India's economic sectors were in a budding stage. Domestic producers needed protection from foreign competition. Therefore, India practised certain restrictions in trade by imposing barriers like imposing heavy taxes on foreign goods and restricting the quantity of goods imported.