What were the reasons for putting barriers to foreign trade and foreign investment by the Indian government? Why did it wish to remove these barriers?
After Independence, the Indian government put barriers to foreign trade and foreign investment to protect the producers within the country from foreign competition. In the 1950s and 1960s, industries were just coming up, and competition from imports at that stage would not have allowed these industries to develop. India allowed imports of only essential items such as machinery, fertilisers, and petroleum.
Starting around 1991, the government decided that the time had come for Indian producers to compete with producers around the globe. It felt that competition would improve the performance of producers within the country since they would have to improve their quality. This decision was supported by powerful international organisations.
Explanation
The answer covers both parts of the question as required. The first paragraph explains the reasons for imposing barriers - protection of domestic industries during their early development stage. The second paragraph explains the reasons for removing barriers - to enable Indian producers to face global competition and improve quality. Key terms like 'barriers to foreign trade and foreign investment' and 'compete with producers around the globe' are highlighted as per the textbook language.