led to a more stringent regime through the FERA, 1973. Foreign exchange per se was considered important and the policy regime comprised rules to grudgingly allocate foreign exchange to various demands. Import control and promotion of import substitution provided complimentary policy instruments.
Beginning midseventies (soon after the enactment of FERA,1973 but not necessarily because of it), the situation relating to the external sector started improving primarily because of increasing remittances from Indian diaspora and impact of green revolution. Thus, through the 1980’s, there was progressive and incremental liberalisation in cross border transactions, albeit within the same paradigm. Two observations are in order here.