India’s trade policy, until the crisis of 1991, had the three objectives of preserving employment in the import-competing sectors, raising revenue through trade restrictions, and promoting self-reliant industrialization. With the focus on protecting the import competing sectors through tariffs and other restrictions, there was little attempt to have a separate export policy. This volume begins by scrutinizing the performance and structure of India’s exports over the last twenty-five years. This is followed by theoretical and empirical analyses of export disincentives and how the recently adopted policy measures–the reduction of taxes and subsidies on exports and imports, the relaxation of quantitative restrictions on imports, and the adjustment of exchange rates–have sought to rectify them. It also examines the issue of quality which has such an important bearing on India’s exports. The unique feature of this book is that it develops explicit analytical models to relate contemporary trade problems to the tenets of economic theory. These frameworks are then used to highlight the possible impact of liberal trade policies and to suggest relevant policy alternatives. It is thus essential reading for policy-makers, researchers and students.
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