After nearly five decades of insulation from world markets, state controls and slow growth, India embarked in 1991 on a process of liberalization of controls and progressive integration with the global economy in an effort to put the economy on a path of rapid and sustained growth. Despite major changes in the governments since then, the thrust of reforms has been maintained. According to the World Bank, only 19 out of 137 countries had more rapid growth than India's at over six percent per year in the 1990's.

In this study, Professors Srinivasan and Tendulkar analyze the economics and politics of India's recent and growing integration with the world economy. They argue that this process has to be nurtured and accelerated if India is to eradicate its poverty and take its rightful place in the global economic system. The topics covered include: historical roots and the political economy of India's late integration; domestic and external constraints on integration; external capital inflows including foreign direct investment; India's emerging comparative advantage in information technology industry and services, particularly computer software. The final chapter offers policy recommendations.