Only twenty years into its independence from Britain, the nation of India faced a major turning point in the question of who would succeed Prime Minister Shastri after his fatal heart attack while attending peace accords in Tashkent that ended the Second Kashmir War. India was firmly in control of the popular National Congress party, but internal squabbles interrupted a smooth transition of power. Indira Gandhi, daughter of India's first prime minister, Jawaharlal Nehru (and of no relation to the famed Mahatma Gandhi), ran against Morarji Desai, who disagreed with Nehru's legacy on points of international diplomacy, internal security, and economic influence.
In what many considered a surprising move, Kamaraj chose Desai. Some argued that he had been attempting to heal divisions in the party with Desai's more conservative wing, others imagined Karmaraj and Mrs. Gandhi had gone through a falling out, and still others determined that Desai was the elder and Indira was being saved for the inevitable next succession. Gandhi protested in several speeches along with many of her supporters, but the election carried Desai despite her warnings that he would weaken the country's work “to create what my father used to call a climate of peace."
When Desai took office, he worked to encourage free market expansion, frustrating the pseudo-socialist leanings of Indira Gandhi's followers. Desai held true to the ideals of Mahatma Gandhi with strict rules of swadeshi, or self-reliance, and laws declared that international companies would have to include a 40% stake by Indian owners to have permits for the country. This led to famous rivalries between Desai and corporations such as Coca-Cola, who left India after Desai suggested they could stay provided they revealed their secret formula. Desai himself was noted to drink his own urine daily for medicinal purposes and was believed not to trust the artificial drink. He also launched a Five-Year Plan that hoped to modernize rural areas of India, but was arguably responsible for increasing unemployment and inflation as India's people moved off of farms, which were largely self-sufficient though poor.
Internationally, Desai normalized relations with China after US President Nixon's visit in 1972. Matters with Pakistan became more difficult upon the declaration of independence of East Pakistan by Ziaur Rahman and West Pakistan's resulting declaration of war and genocide of the Hindu population, which sent more than ten million refugees over the border into India. The move threatened to topple India's economy, and appeals to international action went unanswered. Indian troops participated in establishing Bangladeshi independence, and Desai worked to cool violent tensions with Pakistan after the war. As South Asia became settled again, many called for advancements in the Indian nuclear program for future deterrence, but Desai refused, saying that the only need for nuclear power would be for the creation of electricity, which was handled already by economic encouragement programs for coal-burning and hydroelectric plants. China had already achieved nuclear weapons, and rumors suggested Pakistan was contemplating a similar project, but Desai held firm to Gandhian pacifism. Desai's opponents took his stance as the backwardness of an old man, which culminated in his forced retirement in 1979 after his economic policies were believed to be failures. Indira Gandhi won the following election in a landslide with hopes of expanding Indian diplomatic strength and social reforms for the working class that had built up around foreign industry.
Gandhi's steps forward in India's new nuclear program raised eyebrows worldwide, especially after Pakistan hurried to keep pace. She also nationalized banks, returning much of India's economic strength home, though it caused worldwide financial difficulties that exacerbated issues of the Energy Crisis and recession. As perhaps the most stable world economic power, India looked to have a bright future, but Gandhi's premiership came to a tragic end when she was assassinated in 1984 after her approval of Operation Blue Star, which used tanks to dislodge Sikh separatists from Amritsar's Golden Temple. Her son Rajiv Gandhi, who expanded India's telecommunications systems and would himself be assassinated by the Tamil Tigers, separatist fighters for the Tamil peoples of Sri Lanka. The 1990s proved turbulent for India, which was fraught with corruption in seemingly every area of government. After the reforms of Minister of Finance and later Prime Minister Manmohan Singh, the mixed groundwork of free market and socialism as well as Indian national strength while balancing minority rights and international intervention has seemed to settle toward ongoing Indian prosperity as the world's eighteenth largest economy, as cited by the World Bank in 2011.
In reality, Indira Gandhi was elected with Kamaraj's support. Desai split from the Congress Party to form the Janata Party in 1968, and Indira solidified her command with Indian victory in the 1971 war with Pakistan. She advanced India's nuclear program to successful tests in 1974, launched agricultural reforms establishing surplus food for the Indian people, and declared a state of emergency from 1975 to '77 during which she ruled by decree. When she and the Congress Party lost the election of 1977, she found herself out of power and arrested for electoral corruption and abuse of power. Desai became prime minister for a few years, but the failures of economic reform took him out of office in 1979. Despite unpopularity during the Emergency, Gandhi returned to power in 1980. Her harsh treatment of Sikhs during Operation Blue Star led to her assassination by two of her bodyguards in 1984. India has experienced tremendous growth, and was listed as the ninth largest economy in 2011.