A STUDY ON THE IMPACT OF TRADE LIBERALISATION IN INDIA

Abstract

The impact of trade liberalization in India has been a subject of significant academic and policy interest, particularly since the early 1990s when the country embarked on a path of economic reforms. This research paper explores the multifaceted consequences of trade liberalization on India's economy. Through a comprehensive analysis of empirical data, economic indicators, and scholarly literature, the paper examines both the positive and negative impacts of trade liberalization. The positive effects of trade liberalization are evident in India's impressive economic growth, driven by increased exports, foreign direct investment, and enhanced efficiency and competitiveness of industries. The opening of international markets has expanded consumer choices and improved product quality. Export growth has bolstered foreign exchange reserves and positively influenced the balance of payments. However, this paper also delves into the challenges posed by trade liberalization. It highlights the vulnerability of the Indian economy to external shocks due to increased global integration. Income inequality has widened as the benefits of liberalization have not uniformly reached all segments of society. Job displacement, particularly in industries facing stiff competition from imports, and agricultural challenges arising from competition with cheaper imported agricultural products, are significant concerns. The paper emphasizes the need for policymakers to address the negative consequences of trade liberalization by implementing measures to mitigate income inequality, support displaced workers, and strengthen the agricultural sector. The method used here was the empirical method. The sampling method taken here was the convenient sampling method and the sample size was 200. The sampling frame was established within the city of Chennai, located in the state of Tamil Nadu. The dependent variables are level of awareness regarding the impacts of trade liberalization in India, positive impact of trade liberalization on India's GDP, negative implications of trade liberalization on the Indian economy, main objectives of economic liberalization are the effective distribution of resources and competitive advantages and the independent variables are age, gender, educational qualification, salary and occupation. The research tools used here are simple bar charts, independent sample T test, univariate analysis of variance and correlation . It also underscores the importance of strategic economic planning to manage potential trade imbalances and prevent undue concentration of economic power. In conclusion, this research paper provides a comprehensive analysis of the impact of trade liberalization in India, highlighting its dual nature bringing both opportunities and challenges. By examining empirical evidence and drawing insights from scholarly sources, the paper contributes to a nuanced understanding of the complex relationship between trade liberalization and economic outcomes in India. KEY WORDS: Trade liberalisation, Global market, Trade barriers, Domestic sectors, Gross Domestic Product (GDP).