The first important reform in the external sector was made in the foreign exchange market. In 1991 as an immediate measure to resolve the balance i of payment crisis, the rupee was devalued against foreign currencies. This led to an increase in the inflow of foreign exchange. After liberalisation policy of 1991.
(i) Approval was given for direct foreign investment upto 51% foreign equity in high priority industries.
(ii) Automatic permission was given for foreign technology agreements in high priority industries upto a lumsum payment of Rs.1 crore.