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Trade Policy UPSC |Transport, Communication, and Trade | geography of India

Table of Contents:

  • Trade Policy 
  • Import Substitution Policy
  • New trade Policy since 1991
  • Make in India Program
  • Aatmanirbhar Bharat Program

Trade Policy:

The Policy that promotes or restricts trade is called trade policy. Trade policies are closely related to Industrial policy as both are interdependent

The following are trade policies in India:

  • Import Substitution Policy
  • New trade Policy since 1991
  • Make in India Program
  • Atmnirbhar Bharat Program

Import Substitution trade policy

The first seven five years plant up to 1990, Indian trade policy was characterized as inward-looking trade strategies, technically it is called the "Import Substitution" trade policy.


  • Substituting or replacing imports with domestics production.
  • For example, Vehicle import was substituted by the domestic production of vehicles.

How it was done?

The government protected domestic industries from foreign competition.

It was protected in two forms:

  • Tariff
  • Quota

Tariffs are taxes heavily levied on imported products to make them costlier.

Quota means only a specific quantity would be imported

In this policy, the emulsification of export was not given.

Evaluation of Import Substitution Policy:

  • The industrial share has grown 11.8 % from 1950-to 51 to 24.6 %
  • In 1950-51, industries were characterized by cotton and jute industry, but in 1990-many a variety of production was done in  Indian industries.

LPG reform or New Trade Policies1991:

  • Quota system removed
  • Liberal Import and export
  • Rationalization of tariff barriers
  • Denationalization of Industry
  • Devaluation of rupees to boost export
  • Export houses and complexes
  • Special Economic zones
  • Focus on Service export

2015-16: Make in India trade policy:

Inviting foreign companies to invest and manufacture in India for domestic and export consumption

Post-Covid; Atmnirbhar Bharat or Self-reliant India:

Aim to produce everything that required for consumption


  • Supply chain reforms for Agriculture
  • Rationalizing tax system
  • Simple and clear law
  • Strong Financial System
Try to solve the following questions:
  •  Explain the New Industrial Policies in India. (UPSC 2016, 200 words, 15 marks)

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