35Three Thousand Years of Indian Money
India was one of the three independent inventors of coinage, ran the world's largest economy for most of recorded history, absorbed a large share of the world's silver, and then lost control of its own currency for two centuries.
India's monetary history contains a recurring pattern worth naming. India has repeatedly been a producer of enormous real value — textiles, spices, steel, later software and pharmaceuticals — while the financial infrastructure through which that value was settled was controlled elsewhere: in silver flows India did not mint, in London sterling balances India could not spend, and today in dollar clearing India does not operate.
The productive capacity was never the constraint. The settlement layer was. This is the single most useful frame for reading Chapters 39 and 40.
361947 to 1991: Scarcity, Control and Collapse
Independent India inherited a currency at 3.3 to the dollar and a claim on Britain it could not use. Forty-four years later it had 3.3 weeks of import cover and was flying its gold to London.
Figure 6. The rupee against the dollar, on a logarithmic scale so that equal vertical distances represent equal percentage changes. The three step-changes are policy decisions — 1966, 1991 and 1993 — while the rest is the steady grind of an inflation differential of roughly 3 to 4 percentage points a year. Sources: RBI; Federal Reserve H.10.
The chosen model, and its logic
Independent India adopted import substitution: build everything domestically, restrict imports, license industry, control foreign exchange. The reasoning was not foolish. India had watched two centuries in which openness to trade under someone else's terms had deindustrialised the country. The share of world manufacturing output held by India fell from roughly a quarter in 1750 to about 2 per cent by 1900. Self-reliance was a rational response to that experience.
The system had real achievements: a heavy industrial base, IITs and IIMs, the atomic and space programmes, the Green Revolution which took India from famine-vulnerable to food-surplus, and a diversified industrial structure that most post-colonial economies never built.
It also produced the licence raj. By the 1980s an entrepreneur needed dozens of approvals to start a factory, expand capacity, or import a machine. Waiting lists for a scooter ran to years. Foreign exchange was rationed by the RBI. Growth averaged about 3.5 per cent — the "Hindu rate of growth", a phrase coined by the economist Raj Krishna — against 7 to 10 per cent in East Asia.
1966: the first devaluation
Two failed monsoons, the 1965 war with Pakistan, a suspension of US food aid, and a fiscal deficit the country could not finance. Under pressure from the World Bank and the United States, Indira Gandhi devalued the rupee on 6 June 1966 from 4.76 to 7.50 to the dollar — a cut of about 36 per cent.
It was politically catastrophic. Exports did not respond quickly because export capacity was limited by the licensing system itself, prices rose, and the promised aid arrived slowly and with conditions. The episode entrenched a deep suspicion of devaluation and of Western advice in Indian policy circles that lasted a generation, and arguably delayed reform by fifteen years.
1991: the crisis that changed everything
Three lessons, and the third is the one usually missed.
1. A balance-of-payments crisis is not a budget crisis. India's problem in 1991 was not that it owed too much in rupees. It was that it had no dollars. A country can be fiscally sound and still collapse if it cannot pay for imports. This is why reserves, export earnings and remittances matter independently of the fiscal position.
2. Reform happened because there was no alternative. The same economists had been making the same arguments for a decade. What changed was that the option of not reforming disappeared. This is uncomfortable but historically typical.
3. The gold was the turning point psychologically, not financially. $600 million was a rounding error. But the image of India's gold on an aircraft to London — the reversal of two centuries of extraction — created the political permission for change that economic argument had not. National humiliation is an underrated policy instrument, and India has never forgotten it. Every subsequent decision about reserves, from 1991 to the $703 billion held today, traces to that week.
| Measure | 1991 | 2026 |
|---|---|---|
| Foreign exchange reserves | $1.2 bn | ~$703 bn |
| Import cover | 3 weeks | ~10–11 months |
| GDP (nominal) | ~$270 bn | ~$4.3 tn |
| Exports of goods & services | ~$23 bn | ~$820 bn |
| Average tariff | >80% ~15% (still high by global standards) | |
| Rupee per dollar | 25.9 | ~95.2 |
| Poverty (extreme, World Bank line) | ~45% | under 12% |
37Where India Stands in 2026
The honest balance sheet, with the flattering numbers and the unflattering ones on the same page.
Figure 9. India's reserves reached an all-time high of $725.7 billion in February 2026 before easing to roughly $703 billion by mid-year. The 1991 figure is barely visible on this scale, which is the point. Sources: RBI weekly statistical supplement; CEIC.
The strong numbers
- Services exports of roughly $390 billion, growing at double digits — IT services, global capability centres, engineering R&D, professional services. India is the world's largest exporter of digitally deliverable services after the United States.
- A domestic market of 1.45 billion people, with a middle class that adds tens of millions a year. Scale is a genuine strategic asset that most countries cannot manufacture.
- UPI processing well over 20 billion transactions a month — the largest real-time payments system in the world by volume, and now linked to fast-payment systems in Singapore, the UAE, France, Nepal, Bhutan, Sri Lanka and Mauritius.
- Demographics: median age around 29, against 39 in China and 49 in Japan. India will supply a large share of the world's net addition to the labour force to 2050.
- Public debt held domestically in rupees — roughly 95 per cent, insulating India from the external default mechanism described in Chapter 30.
| $4.3tn | $18.9tn | ~6.5% | $703bn | ~$135bn |
|---|---|---|---|---|
| Nominal GDP — 4th largest by IMF measure | PPP GDP — 3rd largest large economy | Growth — fastest of any in the world | FX reserves — 4th largest largest recipient globally | Annual remittances — |
The weak numbers
- Nominal GDP per capita of about $2,900 — around 140th in the world, comparable to Vietnam and below Indonesia and the Philippines. India is a large economy of not-yet-prosperous people.
- A persistent merchandise trade deficit of roughly $280–300 billion a year, driven by crude oil (about 85 per cent imported), electronics, gold and coal. Services and remittances offset most of it, leaving a current account deficit of about 1–1.5 per cent of GDP — manageable, but a structural dependence on the world's willingness to keep financing it.
- Manufacturing stuck at roughly 15–17 per cent of GDP, against a stated policy target of 25 per cent and China's 27–30 per cent. Production-Linked Incentive schemes have delivered in electronics assembly and pharmaceuticals but not yet transformed the aggregate.
- Bond market depth: India's government securities market is around $1.3 trillion against the US Treasury market's $29 trillion. Foreign ownership of Indian government bonds is roughly 3–5 per cent even after inclusion in the JP Morgan GBI-EM index from June 2024.
- Public debt around 81 per cent of GDP (Centre and states combined) — higher than most emerging peers and a real constraint on fiscal space.
- Female labour force participation around 33–37 per cent, against roughly 60 per cent in China. This is the largest single unexploited growth reserve India has.
Figure 13. India's external debt of roughly $745 billion slightly exceeds its reserves, but short-term debt due within a year is around $135 billion — comfortably covered. This ratio, not the headline total, is what determines vulnerability. Sources: RBI; Ministry of Finance status reports.
$390 billion of services exports against $280–300 billion of merchandise trade deficit. India's external position is held up by services and by remittances from workers abroad. Both are real strengths. Both are also concentrated: a large share of IT services revenue comes from US and UK clients, and a large share of remittances comes from the Gulf. Both are exposed to shocks India does not control — an AI-driven restructuring of outsourced services, a US immigration or tax change, an oil price collapse in the Gulf.
Foreign ownership of Indian government bonds: 3–5 per cent. This is protective — India cannot suffer a sudden foreign exodus from its bond market — and it is also disqualifying. A reserve currency requires foreigners to hold your debt in volume. India currently has the safety that comes from being closed and the irrelevance that comes with it. You cannot have the protection and the international role at once. That is the trilemma of Chapter 21 restated in one sentence, and it is the central strategic choice facing Indian policy in the next decade.
38India's Real Strengths and Real Weaknesses
Measured against the seven pillars of Chapter 13, item by item, without flattery in either direction.
Table 38.1 — India against the seven pillars of reserve currency status
| Pillar | India's position, 2026 | Score | What would have to change |
|---|---|---|---|
| 1. Deep safe-asset market | G-sec market ~$1.3tn; foreign ownership 3–5%; limited liquidity in longer tenors; no deep repo market for foreigners | 2/10 | Full index inclusion, foreign ownership above 20%, a functioning offshore rupee bond market, settlement through Euroclear |
| 2. Rule of law & property rights | Independent judiciary and a genuine constitutional tradition — a real advantage over China. But contract enforcement averages around 1,400 days; tax disputes are notoriously long; retrospective taxation (Vodafone, Cairn) did lasting reputational damage | 5/10 | Commercial court capacity, arbitration enforcement, predictability of tax administration |
| 3. Open capital account | Current account convertible; FDI largely open; portfolio flows, ECB and outward investment restricted; LRS capped at $250,000 | 3/10 | Phased and sequenced liberalisation — the hardest and most dangerous item on this list |
| 4. Network effects | Effectively zero for the rupee as an international currency. Some regional use in Nepal, Bhutan and specific corridors | 1/10 | Decades of accumulated use; cannot be legislated |
| 5. Military reach & alliances | 4th largest defence budget; strong regional position; strategic autonomy doctrine means few formal alliances; still a net arms importer | 5/10 | Defence industrial base, blue-water naval capability, regional security guarantees |
| 6. Energy & food self-sufficiency | Food: strong — net exporter of rice and several commodities. Energy: weak — ~85% of crude imported, the single largest strategic vulnerability | 4/10 | Renewables and nuclear at scale, storage, electrification of transport |
| 7. Technology & institutional stack | Genuine world-class assets: UPI, Aadhaar, ONDC, the digital public infrastructure stack now being exported. Weak in semiconductors, advanced manufacturing, frontier research | 5/10 | R&D spending is ~0.65% of GDP against 2.4% in China and 3.5% in the US. This is the most fixable item |
Total: 25/70. For comparison, the US would score close to 70, the euro area around 45, China around 25 on a different distribution — strong where India is weak, weak where India is strong.
India has an asset that neither China nor Russia can acquire and that no policy can manufacture: it is trusted by both sides.
India buys discounted Russian crude and conducts joint exercises with the United States. It is in BRICS and in the Quad. It is in the Shanghai Cooperation Organisation and in I2U2. Its diaspora runs significant parts of American and British corporate and political life. It has a border dispute with China and a trade relationship worth over $130 billion.
In a world dividing into blocs, the country that can transact with both is not sitting on a fence — it is occupying the most valuable position on the board. Every other player needs a channel to the other side, and India is the only large economy that credibly offers one.
This does not make the rupee a reserve currency. It does make India the most plausible intermediary in a fragmenting system, which is a different and more achievable ambition. Chapter 40 builds on it.
1. India's trade deficit is the binding constraint on rupee internationalisation. To internationalise a currency you must supply it to the world — which means running deficits with countries that then hold your currency. India does run deficits. But partners who accumulate rupees find there is little to buy with them: few rupee assets, restricted markets, and limited Indian exports they want. Russia's accumulated rupee balances from oil sales became a widely reported problem for exactly this reason. Supplying rupees is easy; making them worth holding is not.
2. India cannot both restrict capital and internationalise. Chapter 21. There is no version of this that avoids the trade-off.
3. India's manufacturing share has not moved in twenty years. Despite Make in India, PLI schemes and the China-plus-one narrative, manufacturing remains around 15–17 per cent of GDP. Services have carried India's growth. Services do not employ the tens of millions leaving agriculture. This is India's central domestic economic problem, and it matters more than the dollar.
4. Energy dependence is the sharpest vulnerability. Every $10 on the crude price costs India roughly $13–15 billion a year and pushes the rupee down. Any strategy for monetary sovereignty that does not begin with energy is not a strategy. The renewables build-out is not an environmental programme; it is a currency programme.
39Rupee Internationalisation: The Scorecard
India has been pursuing this seriously since 2022. Here is exactly what has been built, exactly what it has achieved, and exactly where it has stalled.
What has actually been done
Table 39.1 — The rupee internationalisation programme, 2022–2026
| Initiative | Detail | Assessment |
|---|---|---|
| Special Rupee Vostro Accounts (July 2022) | 123 correspondent banks from 30 countries have opened 156 SRVAs with 26 Indian banks. Prior RBI approval for opening them has been removed | Infrastructure genuinely built. Volumes remain modest relative to total trade |
| Local Currency Settlement agreements | UAE (2023), Indonesia, Maldives, Mauritius, Sri Lanka. Direct INR–AED and INR–IDR quotation | The UAE agreement is the most significant — a real corridor with real trade behind it |
| Rupee invoicing data published (Jan 2026) | RBI Bulletin now publishes the share of India's exports and imports invoiced and settled in rupees | Small but important: measurement precedes management |
| INR accounts for overseas bank branches (2025) | Overseas branches of authorised Indian banks may open rupee accounts for non-residents | Creates the beginnings of an offshore rupee pool |
| UPI international linkages | Singapore (PayNow), UAE, France, Nepal, Bhutan, Sri Lanka, Mauritius, Namibia, Peru and others adopting or licensing the stack | India's strongest card. Exporting the rails, not just the currency |
| e₹ (digital rupee) | Retail and wholesale pilots running; cross-border pilots under discussion | Behind China's e-CNY but architecturally sound |
| Bond index inclusion | JP Morgan GBI-EM from June 2024; Bloomberg EM index 2025; FTSE Russell announced | Brought an estimated $20–30bn of passive inflows. The single most consequential financial reform of the period |
| Bilateral currency swaps | Sri Lanka, Maldives, Bhutan, Nepal; SAARC swap framework | Regional, small, but this is exactly how sterling and the dollar started |
What it has achieved, honestly
The rupee's share of global foreign exchange reserves: not separately reported by the IMF — it falls within the "other currencies" category, which totals about 4 per cent across all non-major currencies combined.
The rupee's share of global SWIFT payments: consistently under 0.2 per cent, ranking outside the top fifteen currencies.
The rupee's share of global FX turnover (BIS): roughly 1.6 per cent of the 200 per cent total — that is, the rupee is on one side of about 1.6 per cent of trades, up from 1.0 per cent in 2010. Real growth, from a very small base.
Share of India's own exports invoiced in rupees: in the low single digits.
The clearest test case of the SRVA mechanism came from the corridor where India had the most leverage.
After 2022, India dramatically increased purchases of Russian crude — from under 2 per cent of its imports to over a third at peak. Some of it was settled in rupees through vostro accounts. Russia accumulated large rupee balances.
And then Russia discovered the problem. India ran a large trade surplus with Russia in the wrong direction — India bought far more from Russia than it sold. So Russia was accumulating rupees at a rate it could not spend. Indian government bonds were only partially accessible; Indian exports Russia wanted were limited; converting rupees to other currencies at scale meant taking a spread and hitting market depth limits. Russian officials publicly described billions of rupees as effectively stranded. Settlement shifted substantially to dirhams and yuan.
This is the whole problem of rupee internationalisation in one episode, and it is worth stating precisely: a currency is not internationalised by persuading someone to accept it. It is internationalised by giving them something worth doing with it afterwards. That requires deep, open, liquid rupee asset markets — which requires capital account opening — which is exactly the thing India has decided not to do yet. Everything else is plumbing without water.
Claim: "India is leading the de-dollarisation of the world economy."
Reality: Indian officials have repeatedly and explicitly denied this. The External Affairs Minister has stated on multiple occasions that India has "no interest in weakening the dollar" and that de-dollarisation is not Indian policy. The RBI's own framing is internationalisation of the rupee, which is a defensive and commercial objective — reduce transaction costs, reduce hedging costs, reduce dependence on a single settlement channel — not an offensive one.
This is not timidity. It is a correct reading of India's position. India holds $703 billion in mostly dollar reserves, needs American capital markets, exports heavily to the United States, and is not in a position to want the dollar's value to fall. India's realistic interest is in optionality, not overthrow.
40What India Can Realistically Do
Not a wish list. A sequenced programme, ordered by what must happen before what, with an honest note on which parts are hard and which are dangerous.
The strategic frame first, because it determines everything below. India should not be trying to replace the dollar. That is not achievable this century and pursuing it would waste resources and antagonise a partner India needs. India should be pursuing three narrower objectives:
Objective 1 — Reduce the cost of the current system. Every dollar-intermediated transaction between India and a non-dollar partner pays a conversion spread twice. Direct settlement removes it. This is worth real money and requires no geopolitics.
Objective 2 — Build optionality against disruption. If India were ever subject to secondary sanctions, or if a US–China conflict disrupted dollar clearing, India needs working alternatives. Insurance, not rebellion.
Objective 3 — Make the rupee regionally significant by 2040. Not global. Regional: South Asia, the Gulf corridor, parts of Africa and Southeast Asia. This is achievable and would be historically unprecedented for India.
Tier 1 — High impact, low risk, do now
Deepen the government bond market for foreigners
Complete index inclusion, allow full settlement through Euroclear and Clearstream (currently blocked by a disagreement over foreign oversight of Indian clearing), extend the yield curve, develop a genuine repo and derivatives market. This is the single highest-return action available and it is largely technical rather than political.
Export the digital public infrastructure stack aggressively
UPI, Aadhaar-equivalents, ONDC, account aggregator frameworks. Every country running Indian rails is a country whose payment flows can eventually be settled in rupees. This is India's most distinctive asset and it is being under-exploited relative to its potential.
Expand local currency settlement where the trade balance permits
Focus on corridors where India runs a deficit — so the partner accumulates rupees they can spend on Indian goods — or where India runs a surplus and can accept partner currency. The UAE corridor works because trade is large and roughly two-way.
Build rupee-denominated trade finance capacity
Trade finance is 81 per cent dollar (Figure 3) because banks can fund and hedge dollars. Indian banks issuing rupee letters of credit for regional trade, backed by RBI liquidity facilities, would address the binding constraint directly.
Continue accumulating gold and repatriating it
The RBI has moved over 100 tonnes back from London since 2022 and holds over 880 tonnes. This is cheap, uncontroversial insurance against the Chapter 16 risk.
Tier 2 — High impact, medium risk, do over 5–10 years
Sequenced capital account liberalisation
The correct order, established by the Asian crisis literature and by the Tarapore Committee reports: first strengthen banks and supervision, then deepen domestic bond and derivative markets, then liberalise long-term inflows, then long-term outflows, then short-term flows last. The 1997 Asian crisis happened to countries that opened to short-term capital before their banking systems could handle it. This is where India can genuinely damage itself if it moves fast.
Rupee-denominated commodity contracts
India is the world's third-largest oil importer and among the largest buyers of gold, coal, edible oil and pulses. A liquid rupee-settled commodity exchange with genuine international participation would create structural rupee demand. China has attempted this with mixed results; India's advantage is that its buyers are private and its exchanges are credible.
Regional swap network
Expand beyond the SAARC framework to a standing facility for South Asia, the Gulf and East Africa. The Chiang Mai Initiative is the model. This is how a currency becomes the regional lender of last resort, which is how it becomes a reserve asset.
Cross-border e₹ corridors
India should be building bilateral CBDC settlement with the UAE, Singapore, Sri Lanka and Bhutan now, before the mBridge architecture becomes the default standard for Asia.
Tier 3 — The domestic foundations, which matter more than all of the above
Fix energy dependence
85 per cent import dependence on crude is the single largest structural weakness. Renewables, storage, nuclear and transport electrification are, in monetary terms, a current-account programme. Every percentage point of import dependence removed is permanent support for the rupee.
Raise manufacturing to 20–25 per cent of GDP
Not for its own sake, but because services cannot absorb the labour leaving agriculture, and because a currency's international role ultimately rests on the world needing what you make.
Raise R&D from 0.65 per cent of GDP
China is at 2.4 per cent, the US at 3.5 per cent, Korea above 4 per cent. This is the most mechanically fixable number in this entire report and it compounds over decades.
Female labour force participation
At roughly 33–37 per cent against China's ~60 per cent, this is the largest untapped growth reserve India possesses. Closing half the gap would add materially to GDP growth for two decades.
Contract enforcement and legal predictability
Pillar 2 of Chapter 13 is India's genuine comparative advantage over China — and it is underdelivered. Around 1,400 days for contract enforcement, and a history of retrospective taxation, undercut the one thing India can offer that Beijing structurally cannot.
What India should not do
- Do not pursue a BRICS common currency. It would mean monetary union with China, whose economy is five times larger, with which India has an unresolved border dispute and a large trade deficit. India would be Greece in that arrangement.
- Do not open the capital account rapidly. Thailand 1997, Korea 1997, Indonesia 1998. The sequencing is not bureaucratic caution; it is the accumulated evidence of what happens otherwise.
- Do not target a "strong rupee" as a policy goal. Chapter 19 and Chapter 24. It would tax India's exporters at exactly the moment India is trying to build them.
- Do not frame this as confrontation with the United States. India needs American capital markets, American technology partnerships, and the American market for its services exports. The objective is optionality, and optionality is quieter than opposition.
If India executes Tier 1 well, most of Tier 2, and makes real progress on Tier 3, a plausible 2040 position is:
- Rupee at roughly 1–2 per cent of global reserves — around where the yuan is today.
- 15–25 per cent of India's own trade settled in rupees, concentrated in South Asia, the Gulf and Africa.
- A genuinely deep government bond market with 15–20 per cent foreign ownership.
- The rupee as the regional anchor currency for South Asia, in the way the rand functions in southern Africa or the Australian dollar in the Pacific.
- Indian-built payment infrastructure running in 30–50 countries.
That would be a historic achievement. It would not break the dollar's monopoly, and it is not intended to. It would make India substantially less exposed to it, which is the objective worth pursuing.
41SWOT: India Against the Dollar
The four quadrants, with the evidence from the preceding forty chapters compressed into one page.
STRENGTHS
- Fastest-growing large economy; ~6.5% growth with the runway to sustain it
- 3rd largest by PPP, 4th–6th nominal — and rising in both
- $703bn reserves; ~10–11 months of import cover
- ~95% of public debt in rupees, held domestically — structurally immune to external default
- World's largest remittance inflow (~$135bn) — a stable, non-debt-creating source of foreign exchange
- UPI: the world's largest real-time payment system, now being exported
- Independent judiciary and a constitutional tradition — the pillar China cannot replicate
- Demographics: median age 29; a growing labour force to 2050
- Strategic trust from both blocs — the only large economy that credibly transacts with both
- Food self-sufficiency and a net agricultural export position
WEAKNESSES
- Capital account not convertible — the single disqualifying constraint (Ch. 21)
- G-sec market ~$1.3tn against $29tn for US Treasuries; foreign ownership only 3–5%
- Persistent merchandise trade deficit of ~$280–300bn
- ~85% crude import dependence — the sharpest vulnerability
- Manufacturing stuck at 15–17% of GDP for two decades
- Nominal GDP per capita ~$2,900 — roughly 140th in the world
- Public debt ~81% of GDP limits fiscal space
- R&D at ~0.65% of GDP against China's 2.4%
- Contract enforcement ~1,400 days; history of retrospective taxation
- Female labour force participation ~33–37%
- Rupee under 0.2% of SWIFT payments — effectively zero network effect
OPPORTUNITIES
- Bloc fragmentation creates demand for a neutral intermediary — India is the only credible one
- China-plus-one supply chain diversification, already redirecting real investment
- Digital public infrastructure as an export: every country on Indian rails is a future rupee corridor
- Bond index inclusion (JP Morgan, Bloomberg, FTSE) opening passive foreign flows
- Regional leadership vacuum in South Asia — Sri Lanka 2022 showed India can be the lender of first resort
- Gulf corridor: large two-way trade, an existing LCS agreement, huge Indian diaspora
- CBDC interoperability still unsettled — standards are being written now
- Balassa–Samuelson convergence raises India's nominal world share mechanically as it grows
- Global services trade shifting towards digitally deliverable services, India's strongest sector
- Africa: rising trade, few incumbent currency relationships, receptive to Indian DPI
THREATS
- The dollar's network effect is self-reinforcing and has survived every challenger since 1944
- Yuan and CIPS are far ahead on infrastructure and moving faster
- Dollar stablecoins are extending dollar reach into exactly the markets India would target
- Oil price shocks transmit directly to the rupee and to inflation
- Fed policy shifts trigger capital outflows regardless of Indian fundamentals (2013 precedent)
- AI-driven restructuring of IT services could compress India's largest export earner
- Premature capital account opening could produce a 1997-style sudden stop
- China–India strategic rivalry limits BRICS as a usable vehicle
- US secondary sanctions risk if India's Russia trade is targeted
- Climate: monsoon variability affects ~46% of the CPI basket directly
The pattern is clear and it is not the flattering one. India's strengths are real but almost entirely domestic. India's weaknesses are almost entirely about international financial integration.
India has built a large, fast-growing, increasingly sophisticated economy behind a set of walls that protect it. Those same walls prevent the rupee from mattering internationally. The strengths and the weaknesses are the same fact, viewed from two directions.
This means the strategic question for India is not "how do we get the strengths without the weaknesses?" There is no such option. It is: at what pace, and in what order, do we trade protection for reach — and how much protection are we willing to give up?
Any Indian who tells you the answer is obvious in either direction has not understood the question.