Amid a severe balance-of-payments crisis, the Reserve Bank of India devalued the rupee in two steps, a pivotal early move toward restoring external stability and enabling broader reform.
The government issued the Statement on Industrial Policy (often called the New Industrial Policy of 1991), launching a major shift away from industrial licensing and toward greater private participation and openness to investment.
The Narasimham Committee submitted recommendations that became a blueprint for financial-sector liberalization, including reducing pre-emption (SLR/CRR) and strengthening prudential regulation and supervision.
The Securities and Exchange Board of India gained statutory status, strengthening oversight of capital markets and investor protection—an important institutional pillar of liberalization.
India introduced the Liberalised Exchange Rate Management System (LERMS), moving to a dual exchange-rate mechanism as a transitional step toward a market-determined exchange rate and more liberal external-sector management.
India moved from the dual-rate system toward a unified exchange-rate arrangement, deepening the shift toward a market-determined rupee and simplifying external transactions.
The National Telecom Policy, 1994 set a framework for expanding telecommunications with increased private participation, aiming to accelerate network rollout and improve service availability—key for productivity and new-service growth.
The Tarapore Committee on Capital Account Convertibility proposed preconditions and a phased approach for further opening the capital account, shaping debate on sequencing external liberalization and financial stability.
The National Highways Development Project was launched to modernize major corridors (including the Golden Quadrilateral), reflecting infrastructure-led reforms to reduce logistics costs and support faster growth.
The New Telecom Policy, 1999 refreshed sector strategy, emphasizing competition, expanded access targets, and a stronger regulatory environment—helping set conditions for rapid mobile and internet growth.
The Foreign Exchange Management Act (FEMA) replaced the more restrictive FERA regime, recasting foreign-exchange controls in a facilitative framework for trade and payments and the orderly development of forex markets.
The Competition Act established a modern competition-law framework to curb anti-competitive conduct and replace the MRTP-era approach, aligning market regulation with liberalized, private-sector-led growth.
The Electricity Act, 2003 consolidated power-sector laws and promoted competition and regulatory reform, aiming to improve efficiency, investment, and service delivery in electricity markets.
The Fiscal Responsibility and Budget Management (FRBM) Act introduced a statutory framework to improve fiscal transparency and discipline, reflecting reform-era emphasis on macroeconomic stability.
The Patents (Amendment) Act, 2005 (deemed effective from 2005-01-01) extended product-patent protection to pharmaceuticals and agricultural chemicals, completing key TRIPS-alignment changes with major implications for investment and innovation.
A large group of states adopted Value Added Tax (VAT) to replace cascading sales taxes, a major step toward a more efficient domestic indirect-tax system and a common market.
The Special Economic Zones Act provided a statutory framework for SEZ development and management, aiming to simplify procedures and promote exports and investment.
Key provisions of the Special Economic Zones Act entered into force, operationalizing the single-window and administrative framework intended to accelerate SEZ-led investment and export growth.
Economic Liberalization and Reform Policies (1991–2008)
