Import Liberalisation And Development Of The Indian Computer Industry

The Indian computer industry has come a long way since its total reliance on imports from a few multinationals in the 1960s. However, the current round of import liberalisation is producing an increasing number of features redolent of that earlier period. This article investigates the relationship between import liberalisation and development of industrial production, exports and technological capabilities. It concludes that import liberalism cannot be regarded as the optimum strategy for any country wishing to develop local production capabilities, and that some measure of import protection has to be in place for this development to take place. However, the case is made for a reactive government policy which can apply varying degrees of protection or liberalisation as the circumstances of external change and industrial development demand. Therefore, both the timing and phasing of policy changes will be important. Technical change and other factors are shown to have mediated some outcomes and to have constrained policy choices.