Globalisation refers to the integration of economies worldwide. Which of the following was a major globalisation strategy adopted by the Indian government in 1991?​

Correct option is B

The correct answer is: (B) Reducing trade barriers and encouraging foreign investment

• In 1991, India adopted a series of economic reforms that marked a shift towards globalisation.

• The government reduced trade barriers, such as import tariffs and quotas, and encouraged foreign investment through policies like liberalisation, privatisation, and globalisation (LPG reforms).

• These reforms aimed to integrate the Indian economy into the global market, promoting foreign direct investment (FDI) and improving export competitiveness.

• Import Substitution Industrialisation was a strategy India followed before 1991, where the focus was on reducing imports by encouraging domestic production. This policy was abandoned in favor of export promotion and international trade.

• Reducing trade barriers and encouraging foreign investment were central to the reforms, including policies such as deregulation, the allowance of FDI, and the devaluation of the rupee to make exports cheaper.

• The reforms also led to the liberalisation of the economy, opening up various sectors for private and foreign investment, particularly in industries like telecommunications, automobiles, and information technology.

• Imposing high export tariffs: Contrary to the globalisation strategy, India reduced export tariffs to promote foreign trade and increase export competitiveness post-1991.

• Imposing high import tariffs: Before 1991, India imposed high import tariffs to protect domestic industries, but after the reforms, tariffs were reduced to integrate with global trade markets.