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During 1975 the first initial step was taken by the government with regards to the adopting the notion of free trade and liberalisation process. During this year, more than twenty industries were for the first time made exempt from licensing laws and were able to expand the levels of production and total output beyond the restrictions. In addition, the new changes also allowed MNCs to invest in the newly opened industries, and therefore help improve productivity and efficiency of local firms mainly through mergers and acquisitions. The main aim behind this move taken made the government was to encourage greater expansion of domestic industries, and to encourage foreign investment which would be beneficial to local firms. Furthermore, after the first three years of opening up industries to foreign trade, the government decided to significantly reduce the laws on the imports of raw materials, machinery and other goods that were used in the manufacturing process. Hence, by 1979 import liberalisation was in full operation amongst the selected industries, which enabled local firms to import new machinery in order to increase efficiency and ultimately enhance exports. However, one must not forget that during this period the majority of firms were still relatively poor and therefore were not able to import new capital from abroad. Hence, there were huge disparities between the normal firms who were unable to expand for financial reasons, and the big firms who had established strong links with foreign companies.

Moreover, towards the beginning of the 1980s additional changes were made to the trade liberalisation policies. For instance, in 1982 the chances for new firms to gain an industrial license were made very simple and easily accessible. In addition, the rules and regulations were significantly lowered which meant that most of the new firms were able to operate in specialised industries that were previously heavily monopolised. Towards the mind eighties further reductions were made on imports, which increased the amount of foreign investments and led to the privatisation of many domestic industries. In addition, import liberalisation provided local firms with easy access to foreign capital and adopting new methods of production, this in turn increases the ability of domestic firms to fully utilise their capacity effectively. Nevertheless, though there was huge emphasis placed on liberalising imports in attempt to ultimately increase exports, there was still a relatively huge deficit in the balance of payments for the Indian economy.

In a bid to reduce the differences between the favoured industries and slow growing rural industries, the government provided huge tax break to firms who would set up manufacturing in these so called troubled sectors. For example, in 1985 new policies enabled firms who operated in these areas to be entitled to a 20% deduction in their income tax. Moreover, the all products being imported for the purpose of manufacturing exported goods were exempt from all customs and duty charges. By late 1988 the government had announced further reductions in the policies related to exports and imports, in order to help improve the performance of local firms and increase export competitiveness. Furthermore, by 1990 Export Promotion Zon本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。