he first explanation of why India has done so terribly in attracting manufacturing that made any sense to me (it always astonished me that a low wage country like India would be afraid of the WTO - I understand job loss in high-wage countries). This book, though, is written as a response to Amartya Sen and Jean Dreze and reads a little oddly for that reason - there is a hidden opponent who is sometimes not mentioned explicitly.
From my reading of both books, the big difference in analysis is that Bhagwati analyzes progress between India pre-liberalization and India post-liberalization (mid 80's to early 90's as he identifies it, rather than just 1991). Dreze and Sen though choose to compare India to other 'comparable' countries. They come to different conclusions because the 'control' for each of them is quite different, arguably chosen to satisfy their pre-existing arguments. Personally, though, I find the comparison with other countries completely unconvincing. India is not a 'country' in the sense that most other countries are - it is much more like a continent such as Europe in its diversity of language and history (China and Russia might be similar, but are now very capitalistic states without the cumulative, unchangeable laws in the way that India has).
What was particularly interesting was the fact that (a) the cumulative nature of laws makes for a completely unwieldy and potentially contradictory set of rules (b) democracy forces populist rather than good economic solutions. Economically obvious solutions become impossible and (c) some of the destructive laws are really old - from British times even. In spite of growing up in India I had no idea that so much had carried over from pre-independance.
Bhagwati is clear and convincing. I actually like his point-by-point style. But you do get the sense that he wants to claim credit for some of the reforms that happened (perhaps correctly - I have no idea). Furthermore, since he wants to be an advisor to the government in the future, he pulls his punches a little so that he is not too offensive to Indian political sensibilities. His attacks on hugely wasteful government programs are quite mild, though from an economic point of view these systems are almost certainly wrong-headed schemes that will beggar the government and deliver only a tiny fraction of the value to the people who need it.
Highly recommend it - it left me depressed about India since many of the laws that need to change are hard to change in a democracy with entrenched interests. It also feels somewhat hopeless to try to address the other issues in India until the fundamental laws can be improved to liberalize the labor market in particular.