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6 - From Free Trade to Regulation

The Political Economy of India’s Development

from Part I - Regional Developments

Published online by Cambridge University Press:  03 June 2021

By
Bishnupriya Gupta
Edited by
Stephen Broadberry  and
Kyoji Fukao
Stephen Broadberry
Affiliation:
University of Oxford
Kyoji Fukao
Affiliation:
Hitotsubashi University, Tokyo
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Summary

India integrated into the global economy of the British Empire in 1858 with the transition to Crown rule. The increase in agricultural exports and industrial imports did not lead to economic growth. Even as the share of trade in GDP increased and foreign capital flowed into the export industries and the railways, the economy stagnated. With independence, India retreated from the global economy, but per capita GDP growth turned positive for the first time since 1914. Although trade and foreign investment declined in a regulatory regime, domestic capital formation doubled. The liberalization of the economy after 1980 was built on the foundations of a regulatory regime.

Keywords

Colonializationglobalizationeconomic growth.
Type
Chapter
Information
The Cambridge Economic History of the Modern World , pp. 151 - 175
Publisher: Cambridge University Press
Print publication year: 2021

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