November 21, 2018

World War I: a turning point for the Indian economy

Research Director and Senior Fellow, Niranjan Rajadhyaksha, writes in Mint on the impact of World War I on the Indian economy. Excerpts below:

 

"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."

 

Read the full article here.

 

This article was republished on Stratfor here.

Topic : State Capacity / In : OP-EDS
x Close Window

Please verify your email address to access this content