The world economy entered a period of globalization in the early 1990s. This phenomenon was driven by rapid improvements in computer and information technology, the opening of new markets and tighter economic integration across international borders. Compared to preceding decades, labor and capital became less regulated and much more mobile. However, there is increasing consensus among economists that this period of globalization is coming to an end, and that we are entering into a period of stricter trade and labor restrictions.
India has had deep and long-lasting foreign trade relationships since ancient times. All these trading relationships were accompanied by both, the diffusion of Indian technologies abroad, and the adoption of foreign technologies in India. We highlight some prominent exchanges of this kind, across the ancient, medieval and colonial eras, and discuss their enduring impacts. We then attempt to place the current era of globalization in this historical context. Doing so will allow us to think about how we can make the globalization era have a long-lasting, positive impact on the Indian economy and society. Failure to do this will result in the globalization era passing by as merely a temporary phase in India’s economic history, with no long lasting legacy.
We start with Indo-Roman and Indo-Arab trade in metals, where technology flowed from the east to the west. Techniques for the making high quality ‘Wootz steel’ were developed in ancient South India, before the start of the Common era. This steel was traded over ancient Europe, China, the Arab world and the Middle East, and was renowned as the ‘finest steel in the world’. The Indian techniques were then adopted and improved upon in these areas with time. A notable example in this regard is ‘Damascus steel’, which was developed in the ancient Middle East, and was known for its strength and durability till the 17th century.
Moving forward into the Common Era, an important technology was introduced into India from the East. By 140 CE, Indians acquired techniques for silk production from the Chinese, where the use of silk originated. Over time, silk became an important fabric in India, and a wide variety of silks evolved across the country for various purposes. These ranged from mekhela chadors in Assam, Banarasi sarees in UP to the famed Kanchipuram silk. Today India, along with China is the largest producer of silk, with the two countries accounting for around 60% of global silk output. And India is even today, the world’s largest consumer of silk.
Next, a bit further into the common era, we have examples of technological interchange from the textile industry. In textiles, technology mostly flowed out of the Indian subcontinent to the rest of the world. For nearly two thousand years, India produced and exported cotton fabrics of great quantity and variety to Central Asia, East Asia and Europe. Not surprisingly then, a number of innovations in textile manufacturing ranging from the cotton gin to the spindle to spinning wheels were made in India. In particular, the spinning wheel, invented between 500 and 1000 CE, gained acceptance in both Eastern and Western directions, as the illustrations below show.
Subsequent centuries saw Central Asian Turks establish kingdoms in India. The Mughal dynasty (1550 – 1707 CE) established a major trading relationship between India and Central Asia. And it is to these contacts that we can attribute two more technology adoptions in India. The first was carpet making. Coming from Central Asia, a region with a strong tradition in making carpets, the Mughals duly introduced carpet making to India. Like silk, carpet making spread rapidly throughout the subcontinent, with Varanasi, Jaipur, Srinagar and Amritsar emerging as the most important centres of production. Today, India is the largest exporter of rugs in the world. Indeed, rug making has become thoroughly Indianized, and India is the home of companies like Jaipur Rugs, a global leader in the hand-made rugs category.
After the collapse of Mughal authority in the 1700s, trade with Central Asia lessened. However, Rajasthani kings utilized the Central Asian contacts they had made via the Mughals, to bring in another new technology to India. Expert ceramic artisans were brought to Rajasthan and a new school of pottery was established there. Indian pottery had a long tradition, but ceramic materials and glazing techniques, had not been used much so far. The Jaipur Blue pottery tradition combined these techniques with Indian pottery, and continues to create stunning works of artistry to this day.
With the establishment of British colonial rule, previous trade networks were eliminated and India entered into two centuries of exploitative trading arrangements, exporting raw material to Britain while importing manufactured goods from there. Despite the lack of institutional support, individual initiative for technology transfer was still present. Perhaps the most famous example of such a transfer is motion picture technology, which was almost single handedly popularized in India through the efforts of Dadasaheb Phalke. Although cinema had been introduced in India soon after its introduction in Europe, it was Phalke who travelled to England to learn about the new medium. Starting with Phalke’s ‘Raja Harishchandra’, Indian cinema has gone on to become a defining feature of modern India through our varied film industries.
After independence, scarred by two centuries of colonialism, India followed an economic policy that emphasized self-sufficiency over foreign trade. This allowed the growth of indigenous automobile, pharmaceutical and space industries, but also inhibited the acquisition of latest technologies, and access to foreign capital and markets. But beginning in the late 1980s, India opened its borders to foreign capital and entered into an especially deep trade and labor relationship with the USA, as it had done in previous eras with Central Asia, East Asia and Europe.
In the context of urban India, this contact with the USA has had two major impacts. The first is the inflow of foreign investment and tighter integration with the global economy, especially in cities like Bengaluru, Hyderabad and Mumbai. The second is the movement of skilled, English educated Indian labor abroad, specifically to Anglo countries like USA, UK and Australia. Indian professionals are now widespread throughout the world, as India has become a leading exporter of skilled labour to richer countries. As an example, the Indian population in the US was 815,000 in 1990, but nearly quadrupled in two decades to 2,850,000 in 2010.
At an individual level, the act of migration for skilled Indians represents a chance for professional growth, and a shot at the American/Australian/European dream. Institutionally, this migration has been supported by the widespread English language technical institutes in India, America’s H-1 visa program and the amiable diplomatic relationship between the two countries. But with the winding down of globalized labor, money and technology flows, institutional support will wane. Also, as wages in India rise, many American companies will move their offices and businesses out of India.
In such a scenario, it is imperative that we focus efforts into building complex computer products like operating systems, microprocessors and search engines in India. One might question the need for doing so, since American alternatives are ubiquitous and easily available. But had this been the attitude in previous eras, we would not have had indigenous silk and carpet industries, with India’s own deep, and diverse imprints on them today. We have to learn and introduce difficult, cutting edge skills, not just for economic benefit, but for the chance to bring our civilizational ethos to bear on these human endeavours.