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Impact of Economic Reforms on External Sector

The impact of economic reforms on the external sector during the post reform period was extremely successful in meeting the balance of payments crisis of 1990s. These reforms improved the openness of the Indian economy vis-a-vis other emerging economies. Indian economy is more deeply integrated with the world economy today than it was in 1991 as a result of high growth rate of both exports and imports. Much, however, remains to be done. Indian economy is still relatively closed compared to its “peer competitors”. Further reduction to tariff protection and liberalisation of capital flows will enhance the efficiency of the economy and along with reforms of domestic policies will stimulate investment and growth.