At a time when there is turmoil across the country’s politics—from Parliament to the streets—over various economic and social issues, news from another direction brings a sense of relief to a restless mind. The news is that on February 26, at the first memorial lecture being organized in memory of the late Prime Minister Dr. Manmohan Singh, former German Chancellor Angela Merkel will deliver an address and shed light on India–Germany relations during Manmohan Singh’s tenure.
Dr. Manmohan Singh is remembered by the people of India as one of the least outspoken Prime Ministers, yet he is also regarded as the leader who fundamentally transformed India’s economy. In fact, the phase of economic liberalization that he initiated in 1991, opening India’s markets to foreign companies, is the reason we live today in a market-oriented economy. This shift has inevitably influenced India’s politics as well.
When Manmohan Singh, as Finance Minister in 1991, opened India’s markets to multinational companies, the move carried both equal benefits and risks. At that time, India effectively bid farewell to the socialist economic principles of Jawaharlal Nehru and Indira Gandhi and began moving toward ideas that had earlier been advocated by the Bharatiya Jana Sangh, founded in 1951. After independence, under Nehru’s leadership, India adopted a mixed economy in which participation by the private sector and the state was structured so that national development would proceed with the state retaining significant control over key national resources.
In contrast, Dr. Syama Prasad Mookerjee, founder of the Jana Sangh, believed that the government should stay away from trade and business, leaving these to the private sector, and that India should pursue its overall development by harnessing market forces. In essence, Manmohan Singh adopted this path, leading to a significant rise in both direct and indirect foreign investment in India. He carried out this process methodically and ensured that the private sector gained increasing space within India’s developmental framework. During his tenure, the importance of capital grew, and a development model was shaped that promoted privatization across financial and infrastructure sectors.
As a result, India began moving away from being a traditionally savings-driven economy toward becoming a consumption-driven one, where the rise of new consumerism was inevitable. He integrated India’s economy with emerging global economic trends, enabling the country to emerge as a major international market. Under the umbrella of the World Trade Organization, international trade barriers began to diminish, and countries increasingly benefited from each other’s available economic resources. However, this transformation could not remain without political consequences, especially in democratic countries where the role of capital in forming governments through elections began to increase.
Foreign companies gradually increased their influence in shaping capital flows, and international trade between countries expanded. Market forces started determining the value of labor. For countries like India, this led to accelerated industrialization and innovation aligned with changing market demands. Increased competition in the private sector directly enhanced per capita productivity. Yet, economic liberalization also inevitably influenced India’s foreign policy.
During Manmohan Singh’s tenure, India faced pressure from the United States to reduce its petroleum imports from Iran. Over Iran’s nuclear program, India had to adopt positions in the United Nations that could have adversely affected the historical and cultural ties between the two countries. However, after the disintegration of the Soviet Union in 1990, Manmohan Singh sought to redefine India’s strategic priorities in defense and advanced technology. In 2008, he concluded a civil nuclear agreement with the United States, which enabled India—without signing the Nuclear Non-Proliferation Treaty—to be recognized as the sixth legitimate nuclear power and opened avenues for access to advanced technology.
If we closely examine the political climate of 2008, there was intense turmoil—from Parliament to the streets—over the nuclear deal. The issue even threatened the survival of the Manmohan government. Left parties, which were supporting the government from outside, withdrew their support. The nuclear deal was not an ordinary agreement; it required amendments to U.S. domestic laws as well. Dr. Manmohan Singh entrusted the negotiations to his External Affairs Minister, Bharat Ratna awardee, the late Pranab Mukherjee.
Pranab Mukherjee traveled to the United States and made it clear to then U.S. President George Bush that India could not sign the agreement without parliamentary approval. In the Lok Sabha, after the withdrawal of Left support, the Manmohan government had nearly lost its majority. Nevertheless, Singh was confident that, given the national importance of the historic nuclear agreement, his government would secure a vote of confidence. Accordingly, in July 2008, he convened a special two-day session of the Lok Sabha and sought a trust vote.
Thus, Manmohan Singh’s tenure was marked by significant political turbulence. Today, a similar atmosphere appears to be emerging over the proposed India–U.S. trade agreement, as the opposition is sharply criticizing it—even though the detailed framework of the agreement is still being formulated. Fortunately, Parliament’s Budget Session is underway; only its first phase has concluded, and the second phase will resume in March. Therefore, we should have full confidence that whatever decisions we take will be aimed at securing a brighter future for India’s coming generations.
