Domestic resources costs : a note on evaluation of India's trade policies

Abstract

The criticism of the trade policies which have evolved in India since the Second Five-Year Plan has involved the proposition that India's industrialisation strategy has been incorrect and that the causes of the stagnation which the Indian economy is experiencing has to be located in the trade policies that have been followed. This criticism, if it is correct, has profound implications for our future strategies and programmes. This paper seeks to examine iwhether the evidence and analysis presented by the critics of Indian trade policies are adequate to warratnt the conclusions drawn by them. Section I analyses the argu- ments and evidence in the framework of a simple analytical model and in Section II are discussed the trade policies in the context of other important issues related to India's economic deve7opment expe- rience.