Introduction

Economic growth in India will reshape the world. In 1991, India began a series ofeconomic reforms in response to a severe balance of payments crisis. Many of thereforms led to a substantial liberalization of the corporate sector, directly orindirectly, by easing restrictions on firms’ activities and enhancing overall competition. Now, India’s real gross domestic product (GDP) has increased by an annualaverage of nearly 9% in the past 5 years.Initially, the premodern economy is characterized by activities in agricultureandresource-based activities, low levels of income, and little industrialization.These are fairly low-tech operations, thriving largely on low labor costs. Theeconomic transition to a modern economy is the shift in early industrializationfrom agriculture to factories. In addition, there is a shift to the large-scale industrialcorporation with professional management. Then Indian firms start up a largeorganization for outsourcing business processes to serve companies around theworld. Over time, as have its peers, India has moved into higher-value businesses. As a result, firms in India, as a new champion with China, are becoming increasinglyinnovative in their business models and in their products.