What is a trade barrier? Why did the Indian Government put up trade barriers after Independence? Explain.
Trade barrier refers to the tax put on import by the government to discourage imports.
Indian government put trade barriers because:
1. Industries were just coming up in the 1950s and 1960s. Foreign competition would not have allowed its business to grow.
2. Barriers were put to protect the domestic producers from such competition. Imports of only essential goods were encouraged.
Explanation: Developing countries tend to prioritize development of their domestic companies before exposure to the international market.
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