Hi friends, lets us now see about the three important trade policies: GLOBALISATION, LIBERALISATION AND PRIVATISATION.

GLOBALISATION:
 A prominent development witnessed in the recent years is increasing interdependence of globalization of markets which means trade is extended globally. Globalisation refers, where a country can draw raw materials from any source of the world and manufacture the goods and services. The finished products also find a place in the global market. Globalisation creates an environment in a developing country for the flow of labour, capital and technology from one country to different countries of the world. Globalisation also means that a country becomes economically interdependent at the global level. Many producers outside India can produce and sell their products, similarly Indian manufacturer can produce and sell goods and services to other countries. Entrepreneurs  are free to invest on other countries. Globalisation means not only movement of capital but also labourers from one country to another country.Thus globalisation encourages foreign investors to invest in India. Most of the NRI have invested in Indian market thereby contributing for India’s industrial development.

LIBERALISATION:
 Liberalisation means movement towards a free market system which means that market forces will become more important in determining the decision. Liberalisation is very important both in internal as well as in international trade. In a domestic economy, controls of any kind are provided. Competition is encouraged. Prices are determined according to market force i.e., demand and supply. In the international front liberalisation means eliminating or reducing tariff and non-tariff barriers which means the economy will move towards free trade. WTO encourages liberalisation by organizing world wide negotiations to reduce import controls. Liberalisation helps to relax rules and regulations which posed restriction on private sector.

PRIVATISATION:
 Privatisation means transforming all economic activities from public sector to the private sector. It also refers to the setting up of private units in public utility services. Privatisation increases the efficiency of the people and service. It also helps in motivating the people to work up to the optimum level. The efficiency level also increases and the Government of India in its new macro economic policy adopts GLP i.e., Globalisation, Liberalisation and Privatisation. The sizeable increase in foreign exchange reserves is due to the benefits of Globalisation, Liberalisation and Privatisation, adopted and experienced by India.