- Import Licensing: Before 1991, most imports required licenses, restricting trade. Liberalization eliminated this, promoting easier imports and market competition.
- Foreign Direct Investment (FDI): FDI was strictly controlled, but liberalization made it easier for foreign companies to invest in India, leading to increased capital inflows.
Liberalization of Industrial Policy:
- Industrial Licensing: Most industries required government licenses, restricting entrepreneurship. Liberalization removed this requirement for most sectors, spurring industrial growth.
Liberalization of Financial Markets:
- Banking Sector: The banking sector was dominated by public sector banks, but liberalization allowed private banks and foreign banks to enter the market, introducing competition and improving services.
- Capital Markets: The stock markets and capital markets were opened up to foreign institutional investors (FIIs), increasing investment and diversifying the sources of capital.
Liberalization of Agricultural Markets:
- Agricultural Produce Market Committees (APMCs): Reforms reduced the monopoly of APMCs, allowing farmers to sell their produce directly to private buyers, enhancing competition.
Liberalization of Service Sector:
- Telecommunications: The telecommunications sector was liberalized, allowing private companies to enter, spurring competition, reduced prices, and increased access to mobile phones and internet.
Liberalization of Labor Laws:
- Reforms: Labor laws were reformed to make hiring and firing more flexible, allowing companies to adjust their workforce more easily.
These liberalization measures aimed to promote economic growth, increase competition, attract foreign investment, and modernize various sectors of the economy.