What is a trade barrier? Why did the Indian Government put up trade barriers after Independence? Explain.

Tax on imports is an example of trade barrier. It is called a barrier because some restriction has been set up. Governments can use trade barriers to increase or decrease (regulate) foreign trade and to decide what kinds of goods and how much of each, should come into the country.

• This was considered necessary to protect the producers within the country from foreign competition.
• 1950s and 1960s, and competition from imports at that stage would not have allowed these industries to come up. 
• India allowed imports of only essential items such as machinery, fertilisers, petroleum etc.