India's foreign policy underwent a major shift toward economic diplomacy and global integration beginning in:

Correct option is B

The correct answer is b) 1991.
The year 1991 is considered a "watershed year" in Indian history. It marked the end of the "License-Quota Raj" and the beginning of a paradigm shift in both domestic economic policy and foreign relations.

The Crisis of 1991
The shift was not merely a choice but a necessity driven by a severe Balance of Payments (BoP) crisis. By June 1991, India’s foreign exchange reserves had depleted so much that they could only cover about two weeks of imports. To avoid defaulting on international debt, India had to:

1. Airlift its gold reserves to London and Zurich as collateral for loans.
2. Approach the International Monetary Fund (IMF) and the World Bank for emergency financial assistance.

The LPG Reforms
Under the leadership of Prime Minister P.V. Narasimha Rao and Finance Minister Dr. Manmohan Singh, India launched a series of structural reforms known as LPG:

Liberalization: Reducing government control and opening industries to private players.
Privatization: Selling shares of public sector undertakings (PSUs) to private entities.
Globalization: Integrating the Indian economy with the global market by reducing import tariffs and encouraging foreign investment.