Abstract

This study examines the impact of India’s 1991 liberalization on foreign trade using data up to
2025. Using annual data from 1961 to 2025 (or latest available estimates) and employing paired
t-tests and correlation analysis, we compare the pre-1991 and post-1991 periods to assess
changes in exports and imports. The results show statistically significant increases in both
exports and imports in the liberalization era; however, imports have grown more sharply,
resulting in persistent trade deficits. Recent estimates (FY 2024-25) point to exports of ~ USD
820.93 billion and imports of ~ USD 915.19 billion, yielding a trade deficit of ~ USD 94 billion.
The asymmetry suggests that while liberalization opened export opportunities, it also
accentuated India’s dependence on imports of intermediate goods, capital equipment, energy,
and technology. The study’s findings are consistent with recent empirical literature on trade
liberalization and productivity linkages in India. Policy implications emphasize the need for
export capacity building, strategic trade policy, and deeper integration in global value chains.