India faced a balance of payments crisis in 1991 that pushed the country near bankruptcy. In response, India began liberalizing its economy through various reforms like abolishing industrial licensing, freeing interest rates, and opening the economy to foreign investment and trade. The economic reforms led to rapid GDP growth, exports of IT services, and increases in foreign exchange reserves, investment, and savings over the following decades. However, liberalization also introduced new challenges around governance, infrastructure development, and unemployment.