Abstract
The expansion in the capacity of the states to spend on development was directed to industrialization in India. This is well known, much less well known is the fact that in the process of pursuing heavy industrialization, India repressed an established system of long-distance trade. The rest of South Asia had a rather more benign attitude to trade, though shared India’s enthusiasm for industrialism. The push for industrialization, the costs of that strategy, and its unravelling from the 1980s are explored in this chapter.
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Notes
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This is counterintuitive. Economists often analyse such opening-up effects with the help of the Stolper-Samuelson model on the interaction between trade and factor markets. The prediction of the model is that the demand for the abundant factor and goods intensive in that factor, should rise after liberalization, and the demand for factors that had been scarce but protected before, should fall.
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Roy, T. (2017). Trade and Industry I: India. In: The Economy of South Asia. Palgrave Studies in Economic History. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-54720-6_8
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