CA Foundation · Business Economics · Indian Economy
Which of the following was a key feature of India's trade policy reforms after 1991?
Post-1991 trade reforms reduced tariff rates and removed quantitative restrictions on imports, ending most import licensing. The rupee shifted to a market-determined rate and FDI was opened up, so licensing, FDI bans and a fixed exchange rate do not describe the reforms.
- AIntroduction of universal import licensing for capital goods
- BReduction of tariff rates and removal of quantitative restrictions on importsCorrect
- CComplete ban on foreign direct investment in manufacturing
- DFixing the rupee at a constant rate against the dollar
Explanation
The 1991 reforms dismantled import licensing and quantitative restrictions for most goods and progressively lowered customs duties. The rupee moved towards a market-determined exchange rate and FDI was liberalised, so the other options are the opposite of what occurred.
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