Abstract
Most of the Indian government’s bi- and multilateral trade initiatives are stuck in political deadlock. At the same time, the unilateral measures are lurching between trade restricting and liberalizing policies. By conducting detailed investigations into the process of the trade policy formulation in three industries, this article seeks to discern the societal pressures that are driving the government’s trade preferences and policies. The empirical results show that the government’s tortuous dealings can be explained by two impulses of the domestic industries that have been emanated by the opening of the economy in the 1990s. Most of the domestic industries—grappling with competition from abroad—will call for some form of protection from the global markets. These compulsions, however, endanger the benefits that other domestic industries derive from the global markets—through the access to intermediate goods, foreign investments or export opportunities. This is why they will militate against protectionist interventions. The outcome is an overall consolidation of the open trade regime, which is, however, frequently upset by spats between different domestic industries over the formulation of trade policies.
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