One of the most important phenomena in post-war political and economic history has been the enormous expansion of world trade. Indian trade in particular, grew poorly from 1950-1980 comparisons to other parts of the world, but in 1993 India tanked as the 33rd in top exporting countries and 32nd in top importing countries. One of the main reasons for economic development in India was because India idealised, natural resources of the world are not evenly divided amongst the nations of the world and countries need to depend upon one another for the exchange of their surpluses with the goods, hence the need for foreign trade is natural. Foreign trade affects the domestic trade and markets of India. India is a part of the globalisation and any effect (positive or negative), on the global trade is bound to affect the Indian markets. It was until 1991 that India followed a socialist-democratic approach, which kept it uncommitted to the foreign countries. As these foreign policies were enforced, this greatly brought a great growth in the economy of India but also at the same time to avoid full dependence on other countries for trade – lessen the dependence of foreign countries, as well as make the country self-sufficient in heavy and capital goods industry. There was a very restrictive import policy and vigorous export promotion policy adopted which lead to a long lasting solution to balance the payment problem. With this increase of industrial production, industrialists of Great Britain visualised India as a vast market for for their manufactured goods, and over time these industrial products from Great Britain began engulfing India. The Industrial revolution had also turned England as the world’s workshop where India was the major supplier of raw materials. India’s large population of three hundred million people also was one of the large potential markets for British-made goods. There were many benefits of this foreign policy one of the main ones being to enhance economic growth by providing raw material, intermediates, consumable and capital good for production and derive maximum benefit from expanding globally. |