62 SOCIAL SCIENTIST again. Any large scale import of armaments will only worsen the imbalances in the balance of payments. As the experience of Iraq shows, any military machinery built equipped with imported armaments may be useful to cow down smaller neighbours, but is unlikely to address th? threats in the one super power world. American ambitions of a total hegemony over Asia imply that sooner or later new contradictions will emerge with the middle level powers like China and India. Renewed arms imports on the scale witnessed in the eighties can further undermine the economic sovereignty of the country. The only sustainable strategy to meet this threat has to lie in an independent and modem industrial capability. The petroleum sector too presents a bleak picture. During the last two years, output of crude oil has fallen by about 4 million tonnes. Given this decline and the absence of any new discovery, imports of oil are already rising and are likely to accelerate as industrial activity picks up. An additional import of 3 m. t. per year seems inevitable. Export growth on the scale experienced in 1985-90 period is also unlikely to be sustained due the recession in the West and collapse of the East European market. Unless India can find new markets for its exports and emerging protectionist pressures in the West are not quickly dampened, the medium term outlook is bleak. The liberalisation of the trade regime and export incentives will not be able to avoid a much more severe debt trap. As the Latin American experience shows, the bulk of the growth in incomes can be siphoned off to repay the past liabilities. The nineties may similarly be a lost decade for India. NOTES 1. Bhagwati J. and Desai, P. India: Planning for Industrialisation, OUP, London, 1970. 2. Ahluwalia, I.J. Industrial Growth in India, OUP, New Delhi, 1985. 3. Krueger, A., 'The Political Economy of the Rent Seeking Society', American Economic Review, June, 1974. 4. India, Economic Survey 1987-88, New Delhi, Feb. 1988. 5. India, Economic Survey 1989-90, Delhi, 1990. 6. UNCTAD data cited in Financial Times, Feb. 27,1991. 7. RBI, Annual Report 1988-89, Bombay, July 1989, p. 95. 8. SIPRI, World Armament and Disarmament, 1989, Stockholm. 9. SIPRI, World Armament and Disarmament 1985, OUP, London, 1986. 10. RBI, Annual Report 1990-91, Bombay, 1991, p. 119. 11. Frontline, Aug. 17-Sept. 1.1991 12. India, Economic Survey 1991-92, New Delhi, 1992.