Question

Prior to 1991, the Government of India used as a tool to support the domestic producers and protect them from foreign competition.

• A. trade incentives
• B. trade barriers
• C. foreign investment
• D. domestic investment

Answer 1

The correct option is B trade barriers

Trade barriers are the policies designed to restrict international trade with other countries. They can be in the form of heavy taxes on imports to make foreign goods costly. The restrictions are also in terms of quotas, where the quantity of goods imported is restricted. Prior to the reform of 1991, India had such trade barriers to protect the interest of domestic producers.