Opening up to the global economy has meant a shift from closed import-substitution policies to a more efficient, export-oriented policy aimed at enhancing the international competitiveness of the economy. Incentives have been offered to export-oriented industry, both in the traditional and non-traditional fields. Imports, too, ofseveral items that were previously banned or allowed only with government clearances, have been greatly liberalized.

Source: Business Today, 22 August 1997

The result was an initial boom in export growth, which went from a negative 1.5 per cent in 1991-92 (over the previous year) to 21.3 per cent in 1995-96 in US dollar terms. In 1996-97, exports were valued at US$33,106 million. As the industrial sector started to take off, however, the growth in imports soon outpaced the growth in exports. Import growth, once again in US dollar terms, went from a negative 19.4 per cent in 1991-92 to almost 29 per cent in 1995-96. However, essentials largely make up the import basket, with capital goods accounting for almost 28 per cent and fuel 21.5 per cent (1995-96 figures). Imports, however, along with industry, have seen a slowdown in 1996-97, when growth rates fell to 5.1 per cent over...