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The Indian government, after Independence, had put barriers to foreign trade and foreign investment.

(i)This was considered necessary to protect the producers within the country from foreign competition.

(ii)Industries were just coming up in the 1950s and 1960s, and competition from imports at that stage would not have allowed these industries to come up. 

(iii)Starting around 1991, some farreaching changes in policy were made in India. The government decided that the time had come for Indian producers to compete with producers around the globe.

(iv)It felt that competition would improve the performance of producers within the country since they would have to improve their quality.

(v)This decision was supported by powerful international organisations.

Thus, barriers on foreign trade and foreign investment were removed to a large extent.