It may be recalled that perhaps the most critical use of foreign exchange at that time was for import of food grains; during most of 1960’s over seven per cent of food grain requirement had to be imported. In this backdrop, FERA, 1947 was replaced by Foreign Exchange Regulation Act, 1974.
There is also a comprehensive set of new legislation which aims to reform financial market regulation, covering not only the trading level, but also – for the first time – the infrastructure for clearing and settlement.