IMPACT OF LIBERALIZATION AND GLOBALIZATION ON INDIA’S FOREIGN TRADE

In1991, when the Indian economy was facing a financial crisis, the Indian Government decided to introduce economic reforms. The package of reforms included: liberalization of industrial policy and inviting foreign investment through privatization of industries; liberalization of Export and Import Policy; devaluation of the Rupee; reform of the banking sector; withdrawal of restrictions and government interference in investment. The country has witnessed a spurt in exports barring the years 1997, 2001-02 and 2008. The Government of India has been bringing out five year Trade Policies, since the introduction of Reforms. The basic objectives have revolved around promotion of exports and increasing India’s share in world trade. Liberalization and Globalization has had its positives as well as negatives. The positives include injecting a sense of competitiveness, widening of the size of the market and generation of sustained growth. The negatives are related to defeat of the objective of welfare, increase in unemployment, interdependence among countries can have adverse monetary repercussions, undue emphasis on materialistic way of living and possibility of loss of independence. The introduction of reforms no doubt has led to an increase in GDP with India being termed as one of the ‘fastest growing emerging economy’. However, her international standing in exports and imports is very low ranking of 19 th and 10 th respectively. This has to be changed if India has to make her mark in the International trade sector.