In order to really understand India’s move to liberalize the market, it is best to have some understanding of the history that has lead them to implement such a drastic change. After India’s independence they developed an economic system that was restricted to domestic boundaries and centered on the Industries Development and Regulation Act. This act was what “regulated and restricted entry of new firms and expansion of existing ones” (Aghion, Robin, Stephen, Fabrizio 2). This was later known as the license raj. By following the strict guidelines of the Industries Act, it limited the potential expansion of Indian firms and slowed economic growth. Economic conditions were made even worse, under the rule of Indira Gandhi. During her rule, there
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Narasimha Rao, the prime minister, formed a group whose main focus was to create the necessary reforms for liberalizing India. The act of using these reforms depicts India’s decreasing dependency of the state to achieve economic change (Yeung 75). The most important reforms made included lowering tariff levels, expanding India’s markets, and abolishing the license raj. This was the beginning of India’s economic liberalization. However, this did not go without protest as many Indians found the policies to go against traditions that did not agree with free markets (Pedersen 226). Despite all this, economic liberalization has been able to help India beyond its enactment in the early …show more content…
This is especially prevalent in the case of India’s success in providing services within the information technology department. This was made possible mostly due to the fact that India took the initiative to join the World Trade Organization and made an agreement to eliminated tariffs for most of their information technology products. This has become such an important industry that “almost 45 per cent of service’s exports are accounted for by IT and ITES exports” (Banga, Das 2) Another growing market is the export of services in general, which has increased from “20 percent in the 1990s to around 32 percent in the 2000s” (Banga, Das 2). Attempts to expand India into e-commerce market maybe another plausible opportunity for the near future. (Talloo
Narasimha Rao, the prime minister, formed a group whose main focus was to create the necessary reforms for liberalizing India. The act of using these reforms depicts India’s decreasing dependency of the state to achieve economic change (Yeung 75). The most important reforms made included lowering tariff levels, expanding India’s markets, and abolishing the license raj. This was the beginning of India’s economic liberalization. However, this did not go without protest as many Indians found the policies to go against traditions that did not agree with free markets (Pedersen 226). Despite all this, economic liberalization has been able to help India beyond its enactment in the early …show more content…
This is especially prevalent in the case of India’s success in providing services within the information technology department. This was made possible mostly due to the fact that India took the initiative to join the World Trade Organization and made an agreement to eliminated tariffs for most of their information technology products. This has become such an important industry that “almost 45 per cent of service’s exports are accounted for by IT and ITES exports” (Banga, Das 2) Another growing market is the export of services in general, which has increased from “20 percent in the 1990s to around 32 percent in the 2000s” (Banga, Das 2). Attempts to expand India into e-commerce market maybe another plausible opportunity for the near future. (Talloo