India Review | 2021
Financial liberalization during the Modi government: Political and economic implications
ABSTRACT Financial liberalization has been a gradual, calibrated and uneven process in India. Since the early 90s, Indian financial system has been transformed in accordance with a market-led economic strategy aiming to attract foreign investments and prepare its integration into the international financial circuits, through institutional changes, regulatory easing, public monopolies ending, etc. A few years after the 2008 global financial crisis, during the Modi government, the financial liberalization process has been significantly renovated and reinforced. In addition, old and new challenges have been (re)emerged, and domestic and external factors also have had considerable impacts by unveiling and aggravating systemic fragilities. In this context, the objective of this article is to analyze the financial deregulation process and its political and economic implications for India in the course of Modi’s first government, in view of the foreign investments, the banking system, the insurance sector and the monetary policy.