Globalization and economic nationalism: India's politics of swadeshi

This study focuses upon the ideological debate about globalization within India, and the consequences and significance of this debate for the integration of a developing democracy into the global system. India began to liberalize and open its economy in 1991 following four decades of state regulation, planning and protection. These policy changes elicited strong reactions from various segments of Indian society, prompting an ongoing internal ideological debate about the merits and demerits of globalization and liberalization. Economic nationalists in India have revived the historical term "swadeshi " (meaning literally "of one's country") and contested the concept among themselves in an effort to appropriate its meaning in public discourse and attempt to craft an alternative "third way" to conventional liberalization. This ideological debate has been dominated by two major streams of thought: "nativists" who tend to reject modernization and Westernization and seek indigenous alternatives to conventional "development", and "cosmopolitans", who accept the need for modernization and Westernization. These ideological cleavages simultaneously unite and split India's potential swadeshi coalition. These divisions now threaten to split the Hindu nationalist Bharatiya Janata Party (BJP) just as it has successfully appropriated the term and come to power at the Center.; This study compares five cases in which the swadeshi debate played an important role: protests against the foreign MNC Enron and its proposed power plant in Western India; opposition to KFC and Western fast food restaurants; opposition to Indian membership in the World Trade Organization (WTO); the response of Indian business to globalization in the 1996 national election campaign; and policy shifts by the economic nationalist BJP after coming to power at the center in 1998. The cases demonstrate that India's internal ideological fragmentation and competing concepts of "swadeshi" have weakened its response to pressures from the global economy, allowing the partial implementation of a conventional liberalization program dictated in large part by international economic institutions like the International Monetary Fund (IMF) and WTO. This is because of asymmetrical power relations in the global system, in which global structural power inhibits domestic "agency" in crafting a divergent national response to globalization.