Question

The entry of cheaper imports following the reforms resulted in:

Options

• Rapid expansion of domestic industries

• Decline of domestic industries and deindustrialisation in some sectors

• An increase in public investment in infrastructure

• A rise in India's share of world exports to 5%

Answer 1

Cheaper imports following trade liberalisation led to the decline of domestic industries and deindustrialisation in some sectors. Domestic producers unable to compete with imported goods contracted or shut down entirely.