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Import Liberalisation and Premature Deindustrialisation in India
Liberalising imports by reducing tariffs and removing non-tariff barriers has been one of the most important aspects of the economic reforms pursued in India since the 1990s. The idea was to expose domestic enterprises to international competition to enhance efficiency and promote growth. But rather than promoting efficient growth, this paper shows how import liberalisation has damaged the domestic sector. In the absence of adequate government support, the private sector in manufacturing could not perform the role expected of it. Rejuvenation of the manufacturing sector requires a fundamental reorientation of the role of government.
This is a part of a larger working paper on premature deindustrialisation and the role of the government in India (Chaudhuri 2015). Parts of the paper were presented in seminars at the Fondation Maison des Sciences de l’Homme, Paris, Loreto College, Kolkata and the Jawaharlal Nehru University, New Delhi. The author has benefi ted from comments and suggestions from Julien Vercueil, Sunanda Sen, Praveen Jha and, in particular, from Guilhem Fabre. This is an outcome of the Indian Institute of Management Calcutta and Norwegian Institute of International Affairs collaborative research project on “State, Globalization and Industrial Development in India: The Political Economy of Regulation and Deregulation.”
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