After Independence, the Indian government had put barriers on foreign trade and foreign investment.Initially, Indian industries were just coming up after Independence, so competition from imports wouldn’t have allowed these industries to come up.
In 1999, the government decided that the time had come for Indian producers to compete with the producers around the globe.
It was felt that competition would improve the performance of domestic producers since they would improve the quality of their products.
Thus, barriers on foreign trade and foreign investment were removed to a large extent.
Now, goods could be imported and exported easily and foreign companies could also set up factories and offices here.