A Glimpse of Bharatiyan Economy: Ancient to Contemporary Prospect
-By Nishant Chaturvedi
Ancient times till 1707 AD
The Economic history of Bharat begins with the Indus Valley civilisation, which thrived between 3500 BC and 1800 BC. The inhabitants of the valley were primarily involved in agriculture, animal husbandry, and tool making with copper, bronze, and tin materials. Other trade items included clay pots, beads, gold, silver, colourful stones such as turquoise and lapis lazuli, metals, seashells, and pearls. To assist with trade, they used ships to travel to Mesopotamia. They sell gold, copper, and jewellery. Around 600 BC, the Mahajanapadas minted silver coins for trade. The growth of cities and trade was tremendously active during this period. The Mauryan Empire united most regions of Bharat by 300 BC. The fact that this empire was able to stay united provided security and stability to its economy. Farm produce increased with improved transport facilities, uniform measurement systems, and frequent use of coins, which helped trade go smoothly. For the next 1500 years, Bharat had strong leadership, which generated a huge amount of wealth. Bharat became incredibly wealthy, dominating the global economy and holding roughly 25–33 percent of the world’s wealth between the 1st and 17th centuries AD.
During the Mughal era (1526–1858), Bharat witnessed unprecedented prosperity. The Bhartiya gross domestic product during the 16th century was estimated to be approximately 25.1% of the global economy. An estimation of Bharat’s pre-colonial economy places the annual budget of Emperor Akbar’s treasury in 1600 AD at £17.5 million (compared to the overall treasury of Great Britain two centuries later in 1800 AD, amounting to £16 million). The Gross domestic product of Mughal Bharat in 1600 AD was calculated to be approximately 24.3% of the global economy, the second-largest in the world. By this time, the Mughal Empire had grown to encompass nearly 90 percent of South Asia and had imposed a uniform customs and tax administration system. In 1700 AD, the cashier of Emperor Aurangzeb recorded over £ 100 million in revenue in a year.
According to Professor Angus Maddison, Emeritus Professor at the University of Groningen, Netherlands, and Honorary Fellow at Cambridge University, estimates of Bharat’s wealth as a percentage of world GDP in 1000, 1500, 1600, and 1700 AD. Bharat’s contribution to the world GDP was a bit higher than a quarter in 1000 AD, and less than a quarter between 1500 AD and 1700 AD
| Years | 1000 AD | 1500 AD | 1600 AD | 1700 AD |
| Bharat | 33,750 | 60,500 | 74,250 | 90,750 |
| China | 26,550 | 61,800 | 96,000 | 82,800 |
| West Europe | 10,165 | 44,345 | 65,955 | 83,395 |
| World Total | 116,790 | 247,116 | 329,417 | 371,369 |
Source – Angus Maddison (2001)
In the 18th century, the Mughals were succeeded by the Marathas in most of central Bharat, as well as by other small regional kingdoms that were largely late Mughal tributaries, such as the Nawabs of the north and the Nizams of the south. The British Empire began expanding in Bharat in the mid 18th Century. The era of decline in the Bhartiya industry set in.
The Colonial Rule
The British East Bharat Company, whose political influence increasingly grew in Bharat from 1757 onwards, utilised the enormous revenue earned by the provinces under their control to buy Bharatiyan raw materials, spices, and merchandise. Thus, the steady influx of bullion which had earlier flowed into Bharat in the name of foreign trade, came to a complete halt. The Colonial state utilised land revenue to fight wars in Bharat and Europe, leaving little for the development of Bharat. Within a short period of 80 years (1780-1860 AD) during colonial occupation, Bharat evolved from being an exporter of processed goods for which it was paid in bullion to being a raw material exporter and purchaser of manufactured goods. Specifically, in the 1750s, primarily fine silk and cotton were exported from Bharat to European, Asian, and African markets; by the 1850 raw materials, which primarily consisted of raw cotton, opium, and indigo, formed the bulk of Bharat’s exports.
The ruthless exploitation during British Colonialism completely ruined Bharat’s economy. Bharat’s economy has experienced frequent famines, has one of the world’s lowest life expectancies, is afflicted with widespread malnutrition, and is greatly illiterate. According to British economist Angus Maddison, Bharat’s proportion of the global income decreased from 27% in 1700 (as opposed to Europe’s 23%) to 3% in 1950.
Bharat Since Independence (1950 to 1979)
1950-1979 Following’s independence from colonial powers in 1947, the economy began to rebuild. Bharat selected centralised planning. The Five-Year Plans, which successfully transformed the erstwhile USSR, became a tool for development. The first five-year plan for the development of the Bharatiyan economy was implemented in 1952. Being predominantly an agricultural economy, investments were made in the development of irrigation infrastructure facilities, dam construction, and laying of infrastructure. The emergence of new industries, science and technology centres, and nuclear and space projects was given proper importance. Nevertheless, despite all the efforts on the economic front, the nation did not grow at a fast rate, mainly because of insufficient capital formation, Cold War politics, defence spending, and poor infrastructure. In the years 1951-1979, the economy expanded at a mean rate of about 3.1 percent per annum in constant terms or at 1.0 percent per capita per annum. During this period, business increased at a 4.5 percent average rate per year, versus a 3.0 percent average per year for agriculture.
1980 -1990
In the 1980s, Bharat’s GDP growth rate increased significantly from an average of 2.9% during the 1970s to 5.6% during the 1980s. This was due primarily to two reasons: first, certain early trade and industry reforms, and second, massive government expenditure with foreign borrowing. The investment share in GDP also rose from 19% in the early 1970s to 25% in the early 1980s, but largely in the public sector.
External borrowing has been used to fund Bharat’s import requirements and spur growth. It also brought about a sudden increase in foreign debt from $20.6 billion during 1980-81 to $64.4 billion during 1989-90. Meanwhile, Bharat encountered a Balance of Payments (BoP) crisis beginning in 1979–80, particularly following the second oil shock in 1979 and the Iran-Iraq War in 1980, which increased the price of oil imports. During 1978-79 to 1981-82, Bharat’s import bill virtually doubled.
To cope with this, Bharat borrowed loans and assistance, utilised its IMF Special Drawing Rights (SDRs), and drew under the IMF extended facility. During this period, numerous reforms were implemented: additional items were permitted under the Open General Licence (OGL), canalised imports decreased, export incentives such as REP licences were provided, industrial controls were eased, and the exchange rate was calibrated in the export direction.
Despite these measures, by the end of the 1980s, higher government expenditure and external borrowing had resulted in large deficits. The interest burden increased, and by 1990–91, the current account deficit had reached 3.5% of GDP. This mounting pressure eventually culminated in the 1991 economic crisis.
1991 Onwards
In 1991, Bharat made a historic shift by embracing the Liberalisation, Privatisation, and Globalisation (LPG) reforms, opening its economy to the world. These reforms brought in a wave of foreign investment, boosted exports, modernised industries, and pushed GDP growth to an average of 6–8% per annum in the following decades. From a GDP of just US$267.5 billion in 1992, Bharat became a US$1.85 trillion economy by 2012, and emerged as a global hub for IT services, engineering goods, automobiles, and pharmaceuticals.
Yet, even as Bharat moved forward with globalisation, the Swadeshi ideology focused on self reliance, local production, and national identity in economic decisions never lost its relevance. It served as a balancing force, reminding policymakers to safeguard economic sovereignty, protect small-scale industries, and uplift the rural economy.
Throughout the 1990s and early 2000s, Swadeshi voices shaped national debates from opposing GM seeds to resisting full-scale foreign retail entry. Swadeshi Jagran Manch consistently highlighted the dangers of over-dependence on imports and the erosion of local industries. Despite foreign trade reaching US$785 billion by 2012, the push for self-reliance in MSMEs, agriculture, and defense continued to gain ground.
The post-COVID era gave Swadeshi new life under the Atmanirbhar Bharat campaign. The disruptions caused by broken global supply chains reminded Bharat of the importance of local manufacturing, resilient food systems, and digital independence. This shift did not mean rejecting global trade but seeking a strategic balance where Bharat trades on its terms.
Meanwhile, Bharat’s economic base kept expanding. The services sector, which once accounted for only 24.9% of GDP in 1950–51, had grown to nearly 59% by 2011–12, making Bharat the “back office of the world.” At the same time, the government promoted a stronger manufacturing base through the National Manufacturing Policy (2011), aiming to increase the sector’s share in GDP to 25% and create 100 million jobs by 2025. Reports by CII and McKinsey projected Bharat’s manufacturing exports could hit US$300 billion and the sector could grow sixfold by 2025 to US$1 trillion, driven by both domestic demand and global interest in non-China production bases.
Agriculture, once the backbone of Bharat’s economy, retained its importance. With 485 million livestock, Bharat became the world’s top milk producer and a leader in fresh produce and food processing. Swadeshi thinking played a crucial role here, promoting organic farming, local food chains, and fair pricing for farmers.
Bharat’s Economic Vision
Currently, the Bhart’s Economy is one of the fastest economies in the world. The rising income and savings levels, investment opportunities, huge domestic consumption, and younger population will ensure tremendous growth for decades to come. Bharat’s economic growth is spearheaded by flagship sectors such as Information Technology, Telecommunications, IT-enabled Services (ITES), Pharmaceuticals, Banking, Insurance, Light Engineering, Auto Components, Textiles & Apparel, Steel, Machine Tools, and Gems & Jewellery. These sectors are anticipated to grow extremely fast globally, leading to high demand for Bharatiyan goods and services. According to the World Bank, ICRIER Research Paper, Bharat is currently a US$5.8 trillion economy in Purchasing Power Parity (PPP) terms and is expected to continue its growth momentum in the coming decades. The coming two or three decades will see some core economic transformation in the world, and Bharat will be at the heart of it all. Bharat’s share in world output is expected to grow exponentially—from 5% today to 20.8% by 2040.
