New Delhi, July 31, 2026 — Thirty-five years ago this month, a finance minister facing one of the most acute balance-of-payments crises in India's post-independence history stood up in Parliament and, in a Budget speech that would come to be remembered as one of the most consequential in the country's economic history, quoted Victor Hugo to argue that the emergence of India as a major global economic power was an idea whose time had come. Manmohan Singh's July 24, 1991 Budget speech, and the sweeping liberalisation, privatisation and globalisation reforms it set in motion under the government of P.V. Narasimha Rao, dismantled a labyrinthine system of industrial licensing, eased decades of import restrictions, and threw open India's economy to foreign investment and private enterprise in ways that would have been politically unthinkable just years earlier.
Three and a half decades on, the scale of transformation is, by almost any measure, undeniable. Yet as India marks this anniversary amid an economy that still describes itself as navigating an "unfinished agenda" of reform, it is worth asking a more granular question than simple before-and-after comparison: which specific sectors of the Indian economy actually became globally competitive in the wake of 1991, and which continue to struggle with the kind of structural constraints that the original reforms either failed to address or created in the process of dismantling the old licence-permit raj?
Automobiles: from scarcity to scale
Few sectors illustrate the transformative power of 1991 as vividly as India's automobile industry. The abolition of industrial licensing and the relaxation of foreign investment rules in the sector attracted a wave of global carmakers into India through the 1990s and 2000s, while simultaneously encouraging aggressive expansion by domestic manufacturers who had previously operated within a tightly controlled, low-competition environment. The resulting growth has been extraordinary by any historical standard: annual vehicle production has risen from roughly 2 million units in 1991-92 to nearly 30 million units today, a fifteen-fold expansion that has made India the world's largest three-wheeler manufacturer and placed the country among the two largest global producers of two-wheelers, alongside a leading position in both passenger and commercial vehicle markets.
Beyond sheer production scale, Indian automotive companies including Tata Motors, Mahindra & Mahindra, Maruti Suzuki and TVS Motor have themselves expanded internationally, transforming from purely domestic manufacturers into genuine multinational players with meaningful overseas operations and export markets. Industry estimates suggest automobile and auto-component projects worth roughly ₹70,300 crore are expected to be commissioned between FY27 and FY29 alone, underscoring the sector's continued investment momentum even as it confronts a new set of challenges around building domestic capacity in electric vehicle technology, advanced battery manufacturing and next-generation automotive components — arguably the defining competitive battleground for the global auto industry's next several decades.
Pharmaceuticals: the generic medicine superpower
India's pharmaceutical industry represents perhaps the most globally consequential success story to emerge from the post-1991 reform era, evolving from a domestically focused industry into a major global export sector by combining deep technical expertise in low-cost generic medicine manufacturing with the kind of international market access that liberalisation made possible. Today, India supplies a substantial proportion of the generic medicines consumed not just domestically but across major global markets including the United States, where Indian-manufactured generics play a critical role in keeping healthcare costs manageable for millions of American patients.
This pharmaceutical success story illustrates a broader pattern visible across several of India's post-liberalisation winning sectors: the combination of a large, technically skilled domestic workforce, cost-competitive manufacturing capability, and newly opened access to global markets and capital proved a particularly potent formula in industries where India could leverage genuine underlying competitive advantages, rather than sectors where success depended primarily on capital intensity or infrastructure quality that took considerably longer to develop.
Information technology and services: the sector that defined a generation
If any single industry has come to symbolise India's post-liberalisation economic transformation in the global imagination, it is information technology services. The removal of licensing constraints, combined with liberalised telecommunications infrastructure investment and India's deep pool of English-speaking technical graduates, enabled the emergence of a world-class IT services export industry that has grown to employ millions of Indians directly and indirectly, while establishing Indian companies as indispensable partners to corporations across the globe seeking software development, business process outsourcing and, increasingly, cutting-edge digital transformation and artificial intelligence capabilities.
This IT services success has, in recent years, evolved into an even more significant phenomenon: the Global Capability Centre boom, wherein multinational corporations increasingly establish their own captive strategic technology and operations hubs directly within India, rather than solely outsourcing to third-party Indian IT services providers. This evolution — from services outsourcing destination to strategic capability hub — represents, in many respects, the logical next chapter of the trajectory that 1991's liberalisation first made possible.
Financial markets: from scarcity to democratised investing
Beyond specific industrial sectors, India's financial markets themselves have undergone a profound transformation since 1991, with the establishment of the Securities and Exchange Board of India (SEBI) as an independent capital markets regulator representing one of the specific reforms announced in that landmark 1991 Budget. The subsequent decades have seen Indian households increasingly embrace financial market investing at a scale that would have been unimaginable in the pre-liberalisation era: mutual fund assets under management have grown from less than ₹1 trillion in the early 1990s to approximately ₹82.2 trillion as of June 2026, while monthly systematic investment plan (SIP) contributions by retail investors have reached a record ₹31,781 crore, reflecting the deep and continuing democratisation of financial market participation across an increasingly broad cross-section of Indian society.
The sectors still finding their footing
For all these genuine success stories, India's 35-year post-liberalisation journey has been, by the assessment of most independent economists, only partially complete. Manufacturing as a share of India's overall economic output has not grown to the degree that the original architects of 1991's reforms had hoped, constraining the pace at which India has been able to generate the kind of large-scale, labour-intensive manufacturing employment that comparable Asian economies — most notably China, and more recently Vietnam — have used to drive faster and more broad-based poverty reduction and income growth.
The comparison with China is particularly stark and frequently invoked by economists assessing India's reform trajectory. China's per-capita GDP, which stood at levels roughly comparable to India's own in 1991, has since grown to nearly five times India's current level, a divergence that most economists attribute primarily to the greater consistency and force with which China pursued its own parallel economic reform agenda over the same three-and-a-half-decade period. Vietnam, a considerably smaller economy that has nonetheless emerged as an increasingly serious manufacturing competitor to India in recent years, has seen its own per-capita income rise from under $100 to over $5,000 over a comparable timeframe, further underscoring how India's reform dividend, while substantial in absolute terms, has not always kept pace with the most successful reform trajectories among its Asian peers.
Beyond manufacturing specifically, structural challenges in education quality, healthcare access and overall employment generation continue to constrain how effectively India's headline economic growth translates into broad-based improvements in living standards for the country's full population, rather than being concentrated disproportionately among a smaller, more internationally connected and educated segment of Indian society that has been best positioned to capture the gains from the sectors that succeeded most dramatically since 1991.
What the next chapter of reform might require
Economists assessing India's position 35 years after the original liberalisation reforms increasingly frame the challenge facing current policymakers in somewhat different terms than those confronting the reformers of 1991. Where the original task centred on reducing direct state control over industrial production and investment decisions, the current challenge is often framed instead around improving the state's institutional capacity to effectively regulate an increasingly complex, globally integrated economy, adjudicate disputes efficiently, and deliver the kind of quality public services — in education, healthcare and infrastructure specifically — that are increasingly recognised as prerequisites for translating continued economic growth into genuinely broad-based improvements in human development outcomes.
Some economists have specifically pointed to India's continued absence from major regional trade frameworks such as the Regional Comprehensive Economic Partnership (RCEP) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) as representing a missed opportunity for deeper integration into the kind of regional manufacturing and trade value chains that have benefited many of India's more successful Asian economic peers, even as India pursues its own parallel track of bilateral trade agreement negotiations, including its currently unresolved discussions with the United States.
A milestone, not an endpoint
As India marks 35 years since the reforms that reshaped its economic trajectory, the anniversary offers less a moment of unqualified celebration than an occasion for sober, sector-by-sector assessment — one that recognises genuinely transformative success in industries from automobiles and pharmaceuticals to information technology and financial markets, while acknowledging with equal clarity the structural work that remains unfinished in manufacturing scale-up, human capital development, and deeper integration into global and regional trade architecture. Whatever form the next chapter of Indian economic reform ultimately takes, the lesson of the past 35 years appears to be that consistency and sustained policy follow-through, more than any single dramatic reform announcement, have proven the decisive variable separating India's genuinely global-champion sectors from those still working to catch up.
Telecom: the reform that connected a billion people
Among the less frequently celebrated but arguably most consequential outcomes of India's post-1991 reform trajectory is the transformation of the country's telecommunications sector, from a state-monopoly landline network reaching a small fraction of the population, to one of the world's largest and most competitively priced mobile telecommunications markets, now connecting well over a billion Indians. The liberalisation of telecom licensing through the 1990s and 2000s, followed by intense private-sector competition that drove mobile call and data tariffs to among the lowest levels globally, has had cascading effects across virtually every other sector of the Indian economy, from enabling the digital payments revolution to providing the connectivity infrastructure without which India's IT services and, more recently, GCC booms would have been considerably more difficult to achieve at their current scale.
This telecom transformation also illustrates an important nuance in how liberalisation's benefits have been distributed across Indian society. Unlike some other post-1991 success sectors, whose gains have been concentrated disproportionately among a more educated, urban, internationally connected workforce, affordable mobile telecommunications access has reached genuinely broad swathes of Indian society, including rural and lower-income populations who might otherwise have remained excluded from many of liberalisation's other economic benefits — offering a useful, if imperfect, model for how future reform efforts might aim to achieve more genuinely inclusive outcomes.
Banking and financial sector reform: a longer, more uneven journey
India's banking sector has followed a notably more uneven post-1991 reform trajectory compared to some of the more unambiguous success stories in automobiles, pharmaceuticals or IT services. While the original 1991 reforms included specific measures granting banks greater autonomy in setting deposit rates and reducing the degree of direct administrative control previously exercised over lending decisions, India's banking sector has continued to grapple, across multiple subsequent decades, with periodic asset quality crises, particularly within the public sector banking segment, alongside a slower and more contested path toward full private sector competition compared to sectors like automobiles or telecom that opened more decisively to private and foreign participation.
The past decade in particular has seen renewed reform momentum within Indian banking, including consolidation among public sector banks, tighter regulatory oversight of asset quality and provisioning standards, and — as reflected in this week's own RBI announcement on bulk deposit rate reform — continued incremental efforts to modernise how the sector prices risk and allocates capital. This ongoing, still-unfinished reform trajectory within banking offers a useful reminder that even sectors touched directly by the original 1991 reform agenda have sometimes required multiple additional decades of sustained policy attention to approach anything resembling full structural maturity.
Agriculture: the reform that never quite arrived
Perhaps no major sector of the Indian economy illustrates the "unfinished agenda" framing more starkly than agriculture, which continues to employ a disproportionately large share of India's workforce relative to its contribution to overall economic output, reflecting the sector's persistently lower productivity levels compared to industry and services. Unlike manufacturing and services sectors that benefited directly from the 1991 liberalisation reforms, Indian agriculture has continued to operate within a considerably more complex and, by many economists' assessment, less reformed policy environment, shaped by continued government price support mechanisms, persistent land fragmentation issues, and periodic, politically fraught attempts at agricultural market reform that have met with mixed success and, in some notable instances, significant political resistance and eventual policy reversal.
This agricultural reform gap carries direct relevance to the currently unresolved India-US trade negotiations discussed elsewhere in this publication's coverage, given that agricultural market access has repeatedly emerged as one of the most difficult sticking points in those talks — a reflection of just how politically sensitive and economically significant continued protection of India's vast smallholder farming population remains, even 35 years after the broader liberalisation project began reshaping most other sectors of the Indian economy.
