Nehru and Indira Gandhi created a big capital goods industry behind protectionist walls. This made India widely admired at the time, as a country that could rival the West in technical attainment, even if at higher cost. But today the policy of subsidizing heavy industry behind high tariffs stands exposed as a truly terrible policy. It made India admired for all the wrong reasons that made the Soviet Un?on admired too. The Soviets also built second-rate factories with high-cost machinery, yet for decades was admired as a once-backward country rapidly catching up with the USA. We know today that was a statistical illusion.
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