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Journal for Studies in Management and Planning
Available at http://edupediapublications.org/journals/index.php/JSMaP/
e-ISSN: 2395-0463
Volume 02 Issue 1
January 2016
Available online: http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 147
Liberalization and Indian Business
Naib Singh
Assistant Professor, Deptt. of Commerce, Rajiv Gandhi Govt. College, Saha-(Haryana)
Abstract
Liberalization helps the nation to open its
economy for the business. Liberalization can
be termed as the relaxation of the control of
Government on the economic, social and
political areas for doing the business across
the border. A protected market cannot
motivate the corporate world to do the
business internationally. Liberalization
helps the export and import business at
large. Liberalization helps the
multinationals to make easy the business
abroad. Indian Government announced a
new industrial policy on 31st May, 1990,
which was the milestone for initiating the
liberalization in India. Before the
liberalization process India was a highly
protected country for the global business.
Key Words: Monopolistic Restrictive Trade
Practices (MRTP), Foreign Exchange
Regulatory Act. (FERA), EXIM (Export
Import) Policy, Small Industries
Development bank of India (SIDBI),
Foreign Direct Investment (FDI).
Introductory View
Nowadays world has become a global
village. Modern business has its expansion
beyond the borders of the nations.
International business is more progressive
and gainful than domestic business.
Countries can avail the benefit of
competitive advantage through the
international business. Liberalization has
facilitated the nations to expand their
business within foreign countries.
Liberalization helps the export and import
business at large. Liberalization helps the
multinationals to make easy the business
abroad. A protected market cannot motivate
the corporate world to do the business
internationally. Liberalization can be termed
as the relaxation of the control of
Government on the economic, social and
political areas for doing the business across
the border. Many big industrial houses of
India are making to exports to many
developed countries. Hence liberalization
process has gives a new shape to Indian
business.
Research Methodology
This paper is based on the three main parts
i.e. introduction, main text and conclusion.
For analyzing the role of liberalization
secondary data have been used from the
published and online sources. The
conclusion drawn in the end cannot be
applied to any particular industrial sector.
This is a general study which is based on the
Page 2 of 4
Journal for Studies in Management and Planning
Available at http://edupediapublications.org/journals/index.php/JSMaP/
e-ISSN: 2395-0463
Volume 02 Issue 1
January 2016
Available online: http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 148
impact of liberalization on the Indian
business.
Objectives
The prime objective of this paper is to
highlight the impact of liberalization process
on Indian business. For studying the role of
liberalization the researcher has considered
the various aspects of liberalization process
and its outcomes in the Indian scenario.
Secondary objective is to present a concise
form of inferences in the form of
conclusions.
Indian Scenario
In India liberalization is the encouraging
factor of international trade and business. It
is the encouraging factor of international
trade and business. In India liberalization
process started in 1991. On 31st May, 1990,
Indian Government announced a new
industrial policy which was the milestone
for initiating the liberalization in India.
Before the liberalization process India was a
highly protected country for the global
business. In this year, Government initiated
a significant shift to an open economy for
allowing the private sector to do business at
international level. Main reform in the
liberalization process has been on foreign
investment which has resulted in the
effective picture.
The liberalization process of the country has
emphasized mainly on gradualism and
evolutionary transition. Industrial policy was
restructured for initiating the liberalization
process in the industrial sector. Main step
towards the liberalization was the de- licensing. Now we can buy foreign products
in the country very easily which was like a
dream before 1991. In 2001, quantitative
restrictions were abolished on manufactured
consumer goods and agricultural products
which have created an effective base for the
international trade in these areas.
Government has deregulated the financial
system for more exposure in the
international financial market for making the
free trade.
For giving more free environment to the
industries, government is providing special
relaxations to the Monopolistic Restrictive
Trade Practices (MRTP) and Foreign
Exchange Regulatory Act. (FERA)
companies. In 1982, to achieve maximum
capacity utilization, the scheme of capacity
re-endorsement was announced. For
promoting the exports, special incentives
have been announced for the 100% export
oriented units. A separate liberalized EXIM
(Export Import) policy has been announced
for the purpose.
For promoting the micro, small and medium
enterprises various facilities have been
provided to the entrepreneurs like Small
Industries Development bank of India
(SIDBI) has been established for catering
the financial needs of the small industries.
Government has been raising the investment
limit in the plant and machinery time to time
for making the industrial sector more
competitive.
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e-ISSN: 2395-0463
Volume 02 Issue 1
January 2016
Available online: http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 149
The big benefit of liberalization has been the
inflow of foreign investment in the country.
Government has introduced Foreign Direct
Investment (FDI) in various industrial
sectors. Some sectors have been opened up
to 100% investment for achieving the
benefit of foreign technology and skills. FDI
is the prime source of non-debt financing for
the Indian industry. According the database
of India Brand Equity Foundation (IBEF)
the Indian economy received the investment
of US$ 44.9 billion in 2015.
Table 1: Year Wise Foreign Direct Investment in India (In US $ Million)
P:Provisional
Note: Statics includes FDI through SIA/FIPB and RBI routes only.
Source: RBI Statistics
Liberalization has facilitated the huge
amount of FDI for the Indian business.
Recently India has got a big achievement in
which Japan has won the right to construct
the first bullet train of the country. Japan
offered a loan of US$ 8.11 billion to the
country for this project. Experts have the
view that the emergence of liberalization
will be helpful for Indian industrialist to
access foreign markets more successfully.
Conclusion
Globalization has given the speed to the
Indian business by enabling its
entrepreneurs towards innovative practices.
Indian businessman has presented
themselves at global level with the ideas.
Indian economy is capturing the attention of
many developed nations. A sound industrial
base has come into existence at international
level which will certainly helpful for the
Indian business. Many big industrial houses
of India are making to exports to many
