Internationalisation is a product of globalisation.

The process of
globalisation brought about changes, such as liberalisation and
privatisation, in the former centrally planned economies, which rapidly
enhanced internationalisation process in the world. However, given the
increasing trends towards protectionism, there is a resurgent and
growing interest in the process of internationalisation. The changes in
policy framework have facilitated the process of internationalisation in
India.
India was famous (or perhaps infamous) as the biggest beggar in the
world, seeking food aid and foreign aid from all and sundry. It was
hamstrung by a million controls, imposed in the holy name of socialism
and then used by politicians to create patronage networks and line their
pockets. On attaining independence in 1947, Indian politicians were
worried that imperial foreign rule would return in the guise of economic
domination through trade and investment.
India's share of global trade fell steadily from 2.2 percent at
independence to 0.45 percent in 1985, and that was actually hailed as a
policy triumph by Indian socialists. The public sector was supposed to
gain the commanding heights of the economy. Nothing could be
manufactured without an industrial license or imported without an
import license, which were scarce and difficult to get. Any producers
who exceeded their licensed capacity faced possible imprisonment .
India was perhaps the only country in the world where improving
productivity (and hence exceeding licensed capacity) was a crime.
India was essentially a closed economy.
Its large but inefficient industrial sector supplied 95 percent of domestic
demand for manufactured goods and 100 percent of all consumer
goods, as a 1989 World Bank report noted.
The rupee was hopelessly overvalued, which priced India’s goods out of
world markets, keeping exports at just 5 percent of GDP. This meant that
its foreign exchange earnings to purchase new technology and capital
goods on world markets were severely constrained.
The underlying socialist theory was that the market could not be trusted
to produce good social outcomes, the people would be best served
when they had no right to decide what to produce and no right to decide
what to consume: that was all to be left to a benevolent government.
Under restricted trade, India succeeded in industrializing, but
inefficiency and bureaucratic controls were rampant and economic
growth was slow.
The growth rate prior to reforms so-called Hindu rate of growth was just
3 to 4 percent overall and much slower on a per capita basis.

The Import Substitution Industrialisation (ISI) minimised imports by

supporting indigenous production and according priority to domestic use
in the production. Such trade policy pursuit had a limiting effect on the
nature of integration with the world economy. However, following
gradual changes in policies on account of economic reform in the 1990s,
the flow of ODI has diversified to include developed countries. Between
1985 and 1995 Indian ODI was insignificant compared to other emerging
economies like China, South Africa and Brazil.During this phase, Indian
enterprise, influenced by the inward-looking policy, mainly sought
protection from imports and FDI, and depended largely on domestic
markets.
Policies such as the Monopolies and Restrictive Trade Practices (MRTP)
Act, 1969 and Foreign Exchange Regulation Act (FERA), 1973 created a
restrictive environment for functioning of Indian companies.
Nonetheless, a small number of Indian firms were engaged in
internationalisation process during this period. For instance, Indian
company, Maruti, entered into a joint venture with Japanese company
Suzuki in the 1980s. Similarly, the Birla Group of Companies established
its first major overseas venture in textiles in Ethiopia as early as 1957.
Overall, on account of the restrictive policy framework, the process of
internationalisation was low during this phase.