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Which of the following was a trade-policy reform introduced after 1991 as part of globalisation?

Reducing tariff rates and removing quantitative restrictions on imports was a post-1991 globalisation reform. It opened the Indian economy to foreign trade and competition. More licensing, banning FDI or permanently fixing the rupee would contradict the open, market-oriented direction of the reforms.

  1. AIncrease in import licensing to protect domestic industry
  2. BReduction of tariff rates and removal of quantitative restrictions on importsCorrect
  3. CImposition of a ban on foreign direct investment in manufacturing
  4. DFixing the rupee permanently against the US dollar

Explanation

Globalisation reforms integrated India with the world economy by cutting import tariffs and removing quantitative restrictions on most imports. Greater licensing, an FDI ban or a permanent peg would all move away from openness. Rupee was in fact made partly market-determined after the 1991 devaluation.

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