Liberalisation means relaxation of various government restrictions in the areas of social and economic policies of the country.

Advantages of Liberalisation:

1. Increase in foreign investment: If a country liberalises its trade, it will make the country – more attractive for inward investment. 

2. Increase the foreign exchange reserve: Relaxation in the regulations covering foreign investmefit and foreign exchange has paved way for easy access to foreign capital. 

3. Increase in consumption: Liberalization increases the number of goods available for consumption within a country.

Disadvantages of Liberalisation:

1. Increase in unemployment: Due to liberalisation some industries grow, some decline. Therefore, there may be unemployment from certain industries closing. 

2. Increased dependence on foreign nations: Trade liberalisation means firms will face greater competition from abroad. 

3. Unbalanced development: Trade liberalisation may be damaging for developing economies. which cannot compete against free trade.