India and globalisation

The essentials

India's links with the wider world are old. During the colonial period, India became a supplier of raw materials and a market for British manufactured goods. After independence, India chose a policy of protectionism, building its own industries and limiting imports, with a strong role for the public sector, so that it would be self-reliant.

This approach helped build an industrial base, but growth was relatively slow for a long period. In 1991, facing an economic crisis, India began a series of economic reforms, often called liberalisation, privatisation and globalisation. Restrictions on foreign trade and investment were reduced, and many sectors were opened to private and foreign firms.

Key points

• Supporters point to faster economic growth, more foreign investment, the growth of services such as information technology, and wider consumer choice.
• Critics argue that the benefits have been uneven and that farmers, small producers and informal workers may face greater insecurity.
• Resistance in India has come from varied sources: left-wing parties, trade unions, farmers' groups and movements against the entry of multinational corporations in certain sectors.
• The Indian Social Forum has raised voices against neo-liberal globalisation.
• Some groups have objected to the influence of foreign cultural practices and media.
• India is both an arena where globalisation operates and a participant that shapes global flows, for example through its skilled workers and companies abroad.

Exam tips

Remember 1991 as the starting point of reforms and be ready to explain why India earlier followed protectionism. Balanced questions on the effects of reforms are common.

Common mistakes

• Thinking India had no connection with the world economy before 1991. Links existed in colonial and earlier times; 1991 marked a policy shift.