Indian trade liberation :: essays research papers fc

The International Trade Liberalization of India According to many global economic studies the key to peace is through the promotion of free trade and the institution of democratic principles, this theory also known as liberal international relations theory. In late 1991, with the transfer of the Indian Parliament into the hands of political and economic reformers, despite much opposition, India began its quest towards liberalization. The reform implemented freer trade in the largest democracy in the world. Facets of the Reformed Policy since India's independence from British control in 1947 until India’s Prime Minister Narasimha Rao took office, have characterized Indian’s foreign policy as fairly isolationist. During the Cold War period India retained a policy of nonalignment. It was uncommitted to either the West or the East and stuck to an "Swadeshi" ideology. This Swadeshi ideology simply meaning "India first," and was an extremely nationalistic ideology that advocates self-sufficiency. Just under a decade ago, Indian foreign policy has taken significant strides towards liberalization. Since Prime Minister Narasimha Rao assumed his position as the head of this state in economic shambles, India has undergone significant reform in its domestic and foreign economic policy. Rao's administration implemented major changes in international banking, interest rates, and the ability to fully convert rupees (India's currency) into international tradable transactions. But most importantly, towards the end of 1991, Prime Minister Narasimha Rao opened India's doors to international foreign investment. Many global economic studies stated the reforms in 1991 were simply necessary. As Clive Crook reported in The Economist at the time, the new government attempted to restructure the "ever-proliferating bureaucracy" and the "license raj". This reshaping dismantled the barriers for international foreigners to enter into the Indian markets. Such barriers included ser ies of permits and licenses granted only by members of the Indian Parliament or high-ranking bureaucrats. These complicated and inefficient policies turned away potential foreign investors and, therefore, hurt the Indian economy. As part of the reform plan, Prime Minister Narasimha Rao implemented revolutionary changes. According to the Asian Survey by Nalini Kant Jha, Prime Minister Narasimha Rao limited the equity participation to 40% and removed the provision for the necessity of local control of industry. India also turned into favoring export-led growth; therefore, it removed restrictions on foreign trade and significantly reduced customs duties and tariffs on imports. Since the advancement towards liberalism and the legitimacy of its government, India has strongly remained the largest democracy in the international environment.