India’s policy-makers have tended to view the international economy cautiously. This was especially true before 1991 when multinationals, foreign investors and even expatriate Indians were commonly treated with disdain (Kumar, 1996; Lall, 2001). These policies can be traced back to the nationalist critique of colonialism. Attitudes among policymakers relaxed after 1991 when market friendly reforms were introduced. However, the transformation has been gradual and policy-makers are keen to shield India from instabilities in the global economy. As we shall see, India remains quite inwardly focused. Attempts by the Indian state to direct economic development have had mixed outcomes. On the positive side, India has modest external debts and a stable currency. The economy has developed substantially since the British colonial period. Indian industry has depth and breadth that is unusual for a developing country. Inflation has been kept within tolerable limits and economic growth has been achieved. Until the late 1970s economic growth was modest, with GDP growth averaging 3.7 per cent in the period 1950–64 and 2.9 per cent in the period 1965–79. Critics dubbed this the ‘Hindu’ rate of growth. The GDP growth rate was an impressive 5.7 per cent between 1980 and 2004 (Kohli, 2006: 1254).
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