Lessons from 1998
The 1998 US sanctions on India, imposed after the Pokhran-II nuclear tests in May 1998, were a pivotal moment that reshaped India's economic, strategic, and technological trajectory. Triggered by India’s nuclear tests under the Vajpayee government, these sanctions aimed to penalize India for violating non-proliferation norms. Sanctions included restrictions on technology transfers, suspension of US aid (except humanitarian), bans on defense sales, and multilateral lending curbs by institutions like the World Bank. While the immediate impact was disruptive, the long-term effects catalyzed India's self-reliance, economic reforms, and global repositioning. Economic reforms and growth acceleration Immediate impact The sanctions caused short-term economic turbulence. Foreign capital inflows dropped, with FIIs pulling out $1.2 billion in 1998, and India’s GDP growth slowed to 4.8% in FY99 from 6.5% in FY98. The rupee depreciated by ~12% against the dollar, and export growth sta...