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Sudhakar Reddy
As we know that we can have 25 look up fields and 2 master details relationships on objects.
My questions is why salesforce introduced these limits? can we increase these limits or removed these limitations?
Only Salesforce can answer why they introduced these limitations. To answer your second question, the answer is "probably" No. Emphais on "probably".
However if you need more than 25 lookup fields, you probably need to rethink your schema. I have never encountered a scenario where this was required.
Anup
If you have a minimal request (i.e. please add 2 lookup fields) then you might request customer support increase the limit for your org. They don't have to but in times past they have been very accomidating for such small changes.
The limits were put in place most likely to keep the system small and fast - salesforce uses many pivot tables. That and the query optimizer helps keep the response times very low. Here are some details about their setup.
All of that being said, Anup is correct that your schema is most likley incorrect if you need more than 25 lookup fields.