"The centenary celebration of the end of World War I has mostly focused on its political impact, especially the implosion of multinational empires that led to the creation of new ethnic nations in Europe, as well as the communist capture of power in Russia. In India, the return of Punjabi soldiers after the end of the war also galvanised political activity against colonial rule in that province, which became the spark for wider protests.
Less attention has been lavished on the economic impact of the conflagration. World War I ended the first era of globalization. It was followed by three decades of economic misery thanks to the collapse of global trade, a rising tide of protectionism and deep recessions in several countries. The balance of global economic power began to shift as the US and Japan made a deeper impact on the world economy.
World War I also proved to be a turning point for the Indian economy. The economic historian Tirthankar Roy has explained in his work how the British engagement in World War I had a complicated impact on India. There was a sharp increase in demand for Indian goods in Britain as production capabilities in Britain itself were diverted to the war effort. However, the disruption in shipping lanes because of the war also meant that Indian industry faced dislocations because of the shortage of inputs that were earlier imported from Britain and Germany. There was excess demand as well as supply bottlenecks."
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This article was republished on Stratfor here.