The Shifting Sands of Global Trade
FIRST INSTANCE: The Nehruvian Legacy and Import Substitution India's post-independence economic policy was famously shaped by its first Prime Minister, Jawaharlal Nehru, who championed a planned economy with strong state control and import substitution industrialization (ISI). This approach, formalized in the Second Five Year Plan (1956-1961) , aimed to build self-sufficiency and protect nascent
domestic industries from foreign competition. High tariffs and complex licensing regimes were hallmarks, making India one of the most closed economies globally. The rationale was clear: escape the colonial legacy of resource extraction and build an independent industrial base. While lauded by some as necessary for national sovereignty, critics pointed to its inefficiencies and stunted growth.
REPETITIONS: Slow Liberalization under Duress The commitment to protectionism began to crack under external pressure and internal crises. In the early 1990s, facing a severe balance of payments crisis (1991) , India was forced to undertake significant economic reforms, including devaluation of the rupee, reduction of tariffs, and opening up to foreign investment, largely under the guidance of the
IMF and World Bank. This was not an embrace of 'freer trade' but a reluctant concession. Yet, even after these reforms, India remained notoriously cautious, pulling back from full integration into global supply chains when it felt national interests were at stake, such as its withdrawal from the Regional Comprehensive Economic Partnership (RCEP) in 2019 . This pattern reflects a state that