How did the laws that dealt with problems of India’s participation in international trade increase consumer goods changing the relationship between India and foreign countries?
India’s foreign trade policy before 1991 reforms was characterised by high tariffs and restrictions in importing. Manufactured consumer goods made in other countries, were completely banned and the capital foods and raw materials and intermediate foods (to be used domestically), replaced existing importable through licensing process done by state officials making the most important decisions. During this time period, in order to get a licensed, individuals/founders had to visit Delhi nine times to obtain a license in order to import a personal computer. After Industrialisation, India opened its way to the borders of trade – exports and imports grew from 19% to 30% in 1982, both Congress and BJP parties had committed to increasing free trade which lead to the advantage of World Trade Organization to decreasing domestic trade and increase tariff reductions. Despite the benefits of the foreign trade and laws enforced, business and retail sections were supported by the Communist Party and more labour unions also supported small-scale industries, and fight against liberalizing foreign investment. The tariff remained to be one of the highest for trade until 2003, around 17 billion dollars, although India’s exports are not yet competitive on global markets.