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Opening Up by Cracking Down Published online by Cambridge University Press: 19 October 2022
In the mid-1980s, Prime Minister Rajiv Gandhi attempted to lower India's tariffs and open the country's economy to global competition. Gandhi's trade policy proposals led India's protectionist labor unions to launch a series of general strikes that helped to block these reforms; Gandhi left office in 1989 with India's average tariff still above 80 percent. This chapter continues this story into the 1990s, when Prime Minister Narasimha Rao launched a new attempt at trade liberalization. By 1996, Rao managed to lower India’s average tariffs to 37 percent - a major success compared to Gandhi's efforts, but relatively gradual liberalization compared to many other democratic developing countries. This chapter draws on archival research to illustrate how Rao used labor repression to weaken union opposition to his economic reforms.
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