Indian Markets and its Evolution

A. Indian Economy Until 1990

• Indian economy was influenced by the colonial experience which was seen by the Indian leaders as exploitative.

• Domestic policy tented towards protectionism, with a strong emphasis on import substitution, industrialization, economic interventionism, a large Public sector business regulation and central planning, while the trade and foreign investment policies were relatively liberal. 

• The economic policy was socialist in nature with concentration and emphasis on heavy industries and subsidizing manual, low-skill cottage industries.

• The controls for private sector were tough and there was a constant refusal to change policy with the changing time.

 B. Indian Economy Post 1990

• India first felt globalization in the 1990's when the economic liberalization plan was initiated.

• In 1991, India began liberalizing its economy by decreasing government control over many domestic industries and increasing its openness to the rest of the world. Combined these actions sought to increase competitiveness and encourage innovation. 

• The major reforms in the Indian economy included trade liberalization, financial liberalization, opening up to privatization, tax reforms, inflation control measures, opening to foreign investments and reinforced focus on agricultural development.