This section analyzes the two statements provided regarding India's Trade Policy Reform to determine their accuracy.

Trade Policy Reform & Quantitative Restrictions

Statement I claims that trade policy reform in India involved the removal of quantitative restrictions (QRs) on imports and exports. This statement is correct.

• Following the economic liberalization initiated in 1991, India undertook significant trade policy reforms.
• A major aspect of these reforms was the dismantling of the previous regime of import licensing and quantitative restrictions (QRs).
• The removal of QRs meant that imports of many goods, previously restricted or banned, were allowed subject to tariffs.
• This move aimed to increase competition, improve efficiency in domestic industries, boost access to essential inputs, and integrate the Indian economy more closely with the global market.
• Similar reforms were also implemented for exports, reducing restrictions and encouraging outward trade.

Trade Policy Reform & Import Licensing

Statement II suggests that trade policy reform increased import licensing to support domestic manufacturers. This statement is incorrect.

• The core principle of the trade policy reforms was liberalization, which involved reducing government controls and interventions in trade.
• Instead of increasing import licensing, the reforms aimed at substantially reducing or eliminating it.
• Import licensing was seen as a barrier to trade and a source of inefficiency and corruption.
• While the goal was to support domestic manufacturers in the long run through increased efficiency and access to better inputs, this was to be achieved through enhanced competition and market access, not by increasing import licensing, which would have been a protectionist measure contrary to the reform direction.

Overall Conclusion on Trade Policy Statements

Based on the analysis:

• Statement I correctly identifies the removal of quantitative restrictions as a key feature of India's trade policy reform.
• Statement II incorrectly claims that import licensing was increased; the reforms actually focused on reducing such licensing.

Therefore, only Statement I is accurate.