The tide of US-led globalisation was spreading outward in 1991. Now, it is shrinking inward. It may have made sense in 1991 to use trade as the strategy for economic growth rather than industrial development; not in 2026. In 1991, India switched from the difficult route of building its own high-value adding manufacturing industries to the easier route of imports. Most Indian businesses took this route and became assemblers and marketeers of foreign goods. China, however, continued to build its domestic industries. It was accused of not playing by global trade rules and even stealing foreign technology.

It is important to keep in mind that India and China had comparable technological strengths in manufacturing in the 1980s. Now, India imports from Chinese manufacturers to meet the needs of its consumers and provide machines and electronic hardware for its industries.

India also finds itself squeezed in the geopolitical competition between the US and China. The statistics are revealing. India’s exports to the US were $3 billion in 1991 and imports from that country were $2 billion. India’s exports to the US increased to $86 billion by 2025, and imports to $46 billion — a surplus of $40 billion in India’s favour. Contrast this with India-China trade. It was minuscule in 1991 — less than $0.5 billion. In 2025, India exported $14 billion to China, but it imported $114 billion (almost entirely manufactured goods, including high-tech equipment) — $100-billion trade deficit with China.

India’s external trade-to-GDP ratio is 45% (approximately) today; China’s trade-GDP ratio is 37%. Overall, India’s trade is much less than China’s because........

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