It was only after two post-independence development models failed to address to the fullest, the concerns of poverty, institutionalised socioeconomic inequities, and urban–rural imbalances that inclusive development was born in India. Competition between the Gandhian and Nehruvian models of post-independence development led to "uneven and combined development," which manifested itself in tensions between socioeconomic classes, industrial sectors, and territories (for example, urban versus rural), insufficient physical infrastructure, and poor access to basic health, education and economic opportunities, thereby exacerbating rural poverty.
The rapid expansion of the information and communications technology (ICT) sector was aided by a gradual transition away from import substitution-driven manufacturing in the mid-1980s, although this did not result in broader economic growth. It has also been shown that subsequent efforts with market-driven BOP initiatives based on the tagline "helping the poor, profitably" have been futile. NGO efforts to fill the voids left by states and markets are constrained on a scalar scale as well. The twin failure in India exacerbated already existing inequality, which in turn prompted a pragmatic need for creative solutions by the state in order to maintain its legitimacy. Consequently, inclusive development in India was born. As a result of the twofold failure, a new experimental ground for social innovation has been established known as the hybrid domain. Collaborative experiments and solutions are emerging to address double failure.

One of the distinguishing features of inclusive development is that it does not confine itself to either growth- or redistribution-focused policies. While accepting the necessity of economic progress, it challenges the premise that rising inequality is inevitable. It has the capacity to break the development stalemate. New solutions for the twenty-first century are not driven by the state or the market, but rather by cross-domain cooperation that we have observed.
Do these changes in India represent an actual shift in development policy, or are they merely political posturing or an unpleasant compromise to accommodate a variety of interest groups? As such, the emergence of cross-domain collaborations may not represent a significant shift in development thinking. Contrarily, because a fundamental shift in ideology has not occurred, cross-domain collaborations have not been acknowledged for their effectiveness or relevance and have not been thoroughly studied. Moral hazard, accountability, and power asymmetry are all things to be concerned about while working across domains. However, these concerns are not new or unique to the hybrid domain; rather, these difficulties already exist in the state and market. Cross-domain collaboration is encouraged in the Global North, from Western Europe's long-standing legacy of cooperatives to current measures to make firms more socially viable by designating them benefit corporations. India too requires a framework where social and economic missions are intertwined in the development of solutions, which changes organisations and fosters collaboration.