Globalisation in India

India had the distinction of being the world's largest economy in the beginning of the Christian
era, as it accounted for about 32.9% share of world GDP and about 17% of the world population.
[1]
The goods produced in India had long been exported to far off destinations across the world.
[2]
Therefore, the concept of globalisation is hardly new to India.
India currently accounts for 2.7% of World Trade (as of 2015), up from 1.2% in 2006 according
to the World Trade Organisation (WTO).[3] Until the liberalisation of 1991, India was largely and
intentionally isolated from the world markets, to protect its fledgling economy and to achieve
self-reliance. Foreign trade was subject to import tariffs, export taxes and quantitative restrictions,
while foreign direct investment was restricted by upper-limit equity participation, restrictions on
technology transfer, export obligations and government approvals; these approvals were needed
for nearly 60% of new FDI in the industrial sector.[4] The restrictions ensured that FDI averaged
only around $200M annually between 1985 and 1991; a large percentage of the capital flows
consisted of foreign aid, commercial borrowing and deposits of non-resident Indians.[5]
India's exports were stagnant for the first 15 years after independence, due to the predominance of
tea, jute and cotton manufactures, demand for which was generally inelastic. Imports in the same
period consisted predominantly of machinery, equipment and raw materials, due to nascent
industrialisation. Since liberalisation, the value of India's international trade has become more
broad-based and has risen to 63,0801 billion in 200304 from 12.50 billion in 195051.
India's trading partners are China, the US, the UAE, the UK, Japan and the EU. [6] The exports
during April 2007 were $12.31 billion up by 16% and import were $17.68 billion with an increase
of 18.06% over the previous year.[7]
India is a founding-member of General Agreement on Tariffs and Trade (GATT) since 1947 and
its successor, the World Trade Organisation. While participating actively in its general council
meetings, India has been crucial in voicing the concerns of the developing world. For instance,
India has continued its opposition to the inclusion of such matters as labour and environment
issues and other non-tariff barriers into the WTO policies.
Despite reducing import restrictions several times in the 2000s, India was evaluated by the World
Trade Organisation in 2008 as more restrictive than similar developing economies, such as Brazil,
China, and Russia. The WTO also identified electricity shortages and inadequate transportation
infrastructure as significant constraints on trade.[11][12][13] Its restrictiveness has been cited as a
factor which has isolated it from theglobal financial crisis of 20082009 more than other
countries, even though it has reduced ongoing economic growth.[14]
Effects of globalisation on Indian society
Globalization is a significant factor in competitive world that integrate and mobilize cultural
values of people at global level. In the age of rapid technical progression, many countries are
unified and transformed due to the process of globalization. Globalization has a huge impact on
cultural, social, monetary, political, and communal life of countries. Abundant theoretical studies
demonstrated that globalization intercedes in a cultural life of populace that raises numerous
critical issues (Robertson, 1992). In broad sense, the term 'globalization' means combination of
economies and societies through cross country flows of information, ideas, technologies, goods,
services, capital, finance and people. Globalization is described by theorists as the process

through which societies and economies are integrated through cross border flows of ideas,
communication, technology, capital, people, finance, goods, services and information.
Cross country incorporation has several aspects and can be political, cultural, social and/or
economic, all which equal globalization. Nevertheless, financial integration is the most common
aspects. Economic integration involves developing a nation's economy into an international
economy. After World War I and II the early trends of globalization decreased throughout the
world due to many barriers which restricted the movement of goods and services. In fact, cultural
and social integration are even more than economic integration. Globalization increases
competitiveness at company level and national level, which leads company management and
governments to embrace strategies designed to increase labour effectiveness with reference to
productivity, quality and innovation. Generally, globalization involves economies that are opening
up to international competition and that do not distinguish against international capital.
Consequently, globalization is often accompanied by a liberalization of the markets and the
privatization of productive assets. But globalization also leads to unemployment, increasing
casual employment and weakening labour movements. Theoretical literature denotes that
Globalization has made countries to realize that they can share their cultural values and economic
exchanges to promote business and gain competitive advantage. The fervour of globalization has
even enforced Governments to be tuned to the merits of a Global economy. Management studies
have defined the process of globalization. Fraser (2007) explained that Globalization is a word on
every commentator's lips nowadays, but is very difficult to define satisfactorily, for it arises in so
many different contexts like economic, sociological, political, cultural and environmental.
Akteruzzaman.Md, 2006 stated that globalization is the interconnectedness of nations and regions
in economic domain, in particular, trade financial flows and multinational corporations. The
concept of globalization means that the world is getting smaller as well as bigger.
Akteruzzaman.Md, 2006 described that globalization can contribute to develop pattern of cross
border activities of firms, involving international investment, trade and strategic alliances for
product development, production, sourcing and marketing. These international activities
companies to enter new markets, to exploit their technological and organizational advantages and
to reduce business costs and risks. Other theorists stated that globalization is a social phenomenon
that defines the geographical boundary in terms of many different issues. According Brinkman,
2002, globalization as a triumphalism light, as the penetration of capitalism into every corner of
the world, bringing with it the possibility for all of the world's population to participate in the
fruits of the international division of labour and market economy. ALI, 2015 explained the
globalization as a process of rapid economic, cultural, and institutional integration among
countries. This association is driven by the liberalization of trade, investment and capital flow,
technological advances, and pressures for assimilation towards international standards.
Globalization has reduced barriers between countries, thus resulting in strengthening of economic
competition among nations, dissemination of advanced management practices and newer forms of
work organization, and sharing of internationally accepted labour standards.

Challenges of globalization and its effects

Many theorists asserted that change in environment has both positive and negative aspects
(Harris, 2002). These stimulate driving or resisting forces toward the change of the status quo.
This is most obvious relative to both globalization, and the resulting spread of the global
organization. There are four factors that accelerate globalization.
The market imperative: Impact on national economies of larger, transnational markets
characterized by free, convertible currencies, open access to banking, and contracts enforceable
by law.

The resource imperative: Growing interdependence of nations and their activities on one another,
fostered by the depletion of natural resources, misdistributions of arable land, mineral resources,
and wealth, as well as overpopulation. The undeveloped nations need the capital, technology, and
brainpower of the wealthier countries, while the First World economies are progressively
dependent on the natural and human resources of the developing nations.
The IT imperative: Modernizations in glob communications, science and technology contribute
toward universalization or planarization.
The ecological imperative: Globalization does have great effect on the ecologies and
environments of nations which need to safeguards that lessen the negative effects rather than
exploiting without regard to such concerns.

India was main mover of globalization. The government of India made major modifications in its
economic policy in 1991 by which it allowed direct foreign investments in the country. As a result
of this, globalization of the Indian Industry occurred at large scale. In India, economic expansion
was observed in nineteenth century due to major crisis led by foreign exchange. The liberalization
of the domestic economy and enhanced incorporation of India with the global economy helped to
step up gross domestic product (GDP) growth rates which made good position in global scale.
Effects of globalization in Indian Industry are observed as this process brought in large amounts
of foreign investments into the industry especially in the BPO, pharmaceutical, petroleum, and
manufacturing industries. As a result, they boosted the Indian economy quite significantly. The
benefits of the effects of globalization in the Indian Industry are that many foreign companies set
up industries in India, especially in the pharmaceutical, BPO, petroleum, manufacturing, and
chemical sectors and this helped to offer great opportunities for employment to Indian people.
Also this helped to reduce the level of unemployment and poverty in the country. It is observed
that the major forces of globalization in India has been in the development of outsourced IT and
business process outsourcing services. Since last many years, there is an increase of skilled
professionals in India employed by both local and foreign companies to service customers in the
US and Europe. These countries take advantage of India's lower cost but highly talented and
English-speaking work force, and utilizes global communications technologies such as voice-over
IP (VOIP), email and the internet, international enterprises have been able to lower their cost base
by establishing outsourced knowledge-worker operations in India. The foreign companies brought
in highly advanced technology with them and this made the Indian Industry more technologically
advanced. Globalization in India has been beneficial for companies that have ventured in the
Indian market. It is recommended by researchers that India has to focus on five important areas to
enhance its economic status. The areas include technological entrepreneurship, new business
openings for small and medium enterprises, the importance of quality management, new
prospects in rural areas and privatization of financial institutions.
In terms of export and import activities, Many Indian companies have expanded their business
and became famous at global level such as fast food, beverages, and sportswear and garment
industries. Records indicated that Agriculture exports account for about 13 to 18% of total annual
export of the country. In 2000-01, agricultural products valued at more than US$6 million were
exported from the country of which 23% was contributed to the marine products alone. Marine
products in recent years have emerged as the single largest contributor to the total agricultural
export form the country accounting for over one fifth of the total agricultural exports. Cereals
(mostly basmati rice and non-basmati rice), oil seeds, tea and coffee are the other prominent
products each of which accounts for nearly 5 to 10% of the countries' total agricultural exports.
Globalization speeded export of food items in India in the form of increased consumption of
meat, western fast food, sodas and cool drinks, which may result in public health crisis. The rich
biodiversity of India has yielded many healthy foods prepared from locally available entities. But
the marketing by MNCs with large advertisement campaigns lead the people to resort to their
products.

Technological and Cultural impact of globalization in India

With the process of globalization, there is an access to television grew from 20% of the urban
population (1991) to 90% of the urban population (2009). Even in the rural areas satellite
television has a grown up market. In the cities, Internet facility is everywhere and extension of
internet facilities even to rural areas. There is an increase of global food chain /restaurants in the
urban areas of India. Excessive Multiplex movie halls, big shopping malls and high rise
residential are seen in every cities. Entertainment sector in India has a global market. After
economic liberalization, Bollywood expanded its area and showed a major presence in the global
scale. The industry began to explore new ways to become more global and modern. In India,
modernity is observed with the West. Therefore, Western philosophy began to be incorporated
into Bollywood films. As these new cultural messages began to reach the Indian population,
Indian moviegoers were pushed to re-evaluate their traditional Indian cultural ideology.
Bollywood movies are also distributed and accepted at international level. Big international
companies (Walt Disney, 20th Century Fox, and Columbia Pictures) are investing on this sector.
Famous International brands such as Armani, Gucci, Nike, and Omega are also making
investment in the Indian market with the changing of fashion statement of Indians.
Impact of globalization on education in India
There is immense effects observed in educational sector due to globalization such as literacy rate
become high and Foreign Universities are collaborating with different Indian Universities. The
Indian educational system faces challenges of globalization through Information technology and
it offers opportunities to evolve new paradigms shifts in developmental education. The distinction
between formal, non-formal and informal education will vanish when move from industrial
society to information society takes place. Globalization promotes new tools and techniques such
as E-learning, Flexible learning, Distance Education Programs and Overseas training.
It is observed in current Indian society that through globalization, women have gained certain
opportunities for job options and to recognize women's rights as a part of the human rights. Their
empowerment has given considerable opportunities and possibilities of improving employment
conditions through global solidarity and co-ordination. It is found that the growth of computer
and other technologies enabled women with better waged, flex timings, and capacity to negotiate
their role and status in home and at corporate level.
There are some negative impact of globalization such as this process made disparity between rural
and urban Indian joblessness, growth of slum capitals and threat of terrorist activities.
Globalization increased competition in the Indian market between the foreign companies and
domestic companies. With the foreign goods being better than the Indian goods, the consumer
preferred to buy the foreign goods. This reduced the amount of profit of the Indian Industry
companies. This happened mainly in the pharmaceutical, manufacturing, chemical, and steel
industries. The negative Effects of Globalization on Indian Industry are that with the coming of

technology the number of labour required are decreased and this resulted increasing
unemployment especially in the arena of the pharmaceutical, chemical, manufacturing, and
cement industries. Some section of people in India that are poor do not get benefit of
globalization. There is an increased gap between rich and poor that lead to some criminal
activities. Ethical responsibility of business has been reduced. Another major negative effect of
globalization in India is that youngsters of India leaving their studies very early and joining Call
centres to earn fast money reducing their social life after getting habituated with monotonous
work. There is an increase of every daily usable commodities. This has an adverse effect on
cultural aspect. The institution of marriage is breaking down at fast rate. There are more people
approaching divorce courts instead of maintaining marital life. Globalization has considerable
impact on the religious situation of India. Globalization has brought about raising a population
who is agnostic and atheist. People visiting places of worship are reducing with time.
Globalization has reduced nationalism and patriotism in country.
It can be said that Globalization is motivating factor in current business environment. There are
few challenges for companies due to globalization such as Migration, relocation, labour
shortages, competition, and changes in skills and technology. Globalization powerfully influences
the social partners' attitudes since traditional labour relations have to cope with completely new
and very dynamic situations. In political field, globalization helps to eradicate poverty,
malnutrition, illiteracy, ill-health and fighting cross border terrorism and global terrorism.
Globalisation in context of status of women implicates the relegation of the stereotypic pattern of
duties of the women like rearing and caring the children to the back ground and taking up the
various diversified occupation and thus making their living quite vibrant and alive. Globalisation
benefits the schedule caste people in promoting cultural homogeneity in the way of loosening of
the ideas of pollution and purity and eradication of untouchability and so many socio-cultural and
economic disabilities associated with them. Globalisation of goods has developed enthusiasm in
India for western brand names. A consumerist mentality has been carefully fostered. This leads to
an adversative impact on the tendency to save or the domestic accumulation of capital. Lastly, in
Indian scenario, globalization developed a consumer credit society. Today, people can buy goods
and services even if they do not have sufficient purchasing power and the prospect of raising a
loan has become easy in the age of globalisation. Credit cards have given boost to consumerism
and pushed many households into indebtedness. At the same time globalization has unfavourable
impact on mass-media in India. Currently, realistic coverage of events and happening doesn't
receive much importance because it doesn't determine the standing of a newspaper or TV channel.
Globalisation has brought violation of journalistic ethics in India.
To summarize, the process of globalization has changed the industrial pattern social life of global
people and it has immense impact on Indian trade system. The globalization of the economic,
social and cultural structures happened in all ages. Previously, the pace of process was slow.
Today with the start of the information technology, new ways of communication have made the
world a very small place. With this process, there is a big market place. Globalization has resulted

in increase in the production of a range of goods. MNCs have established manufacturing plants all
over the world. It has positive effects and India will overcome many obstacles and adopt global
policies to expand business at international scale. India is gaining international recognition and
strengthening in economic and political areas.

Impact of globalization on Indian economy- An overview

Introduction
Indian economy had experienced major policy changes in early 1990s. The new economic reform,
popularly known as,Liberalization, Privatization and Globalization (LPG model) aimed at
making the Indian economy as fastest growing economy and globally competitive. The series of
reforms undertaken with respect to industrial sector, trade as well as financial sector aimed at
making the economy more efficient.
With the onset of reforms to liberalize the Indian economy in July of 1991, a new chapter has
dawned for India and her billion plus population. This period of economic transition has had a
tremendous impact on the overall economic development of almost all major sectors of the
economy, and its effects over the last decade can hardly be overlooked. Besides, it also marks the
advent of the real integration of the Indian economy into the global economy.
This era of reforms has also ushered in a remarkable change in the Indian mindset, as it deviates
from the traditional values held since Independence in 1947, such as self reliance and socialistic
policies of economic development, which mainly due to the inward looking restrictive form of
governance, resulted in the isolation, overall backwardness and inefficiency of the economy,
amongst a host of other problems. This, despite the fact that India has always had the potential to
be on the fast track to prosperity.
Now that India is in the process of restructuring her economy, with aspirations of elevating herself
from her present desolate position in the world, the need to speed up her economic development
is even more imperative. And having witnessed the positive role that Foreign Direct Investment
(FDI) has played in the rapid economic growth of most of the Southeast Asian countries and most
notably China, India has embarked on an ambitious plan to emulate the successes of her
neighbors to the east and is trying to sell herself as a safe and profitable destination for FDI.
Globalization has many meanings depending on the context and on the person who is talking
about. Though the precise definition of globalization is still unavailable a few definitions are
worth viewing, Guy Brainbant: says that the process of globalization not only includes opening
up of world trade, development of advanced means of communication, internationalization of
financial markets, growing importance of MNCs, population migrations and more generally
increased mobility of persons, goods, capital, data and ideas but also infections, diseases and
pollution. The term globalization refers to the integration of economies of the world through
uninhibited trade and financial flows, as also through mutual exchange of technology and
knowledge. Ideally, it also contains free inter-country movement of labor. In context to India, this
implies opening up the economy to foreign direct investment by providing facilities to foreign
companies to invest in different fields of economic activity in India, removing constraints and

obstacles to the entry of MNCs in India, allowing Indian companies to enter into foreign
collaborations and also encouraging them to set up joint ventures abroad; carrying out massive
import liberalization programs by switching over from quantitative restrictions to tariffs and
import duties, therefore globalization has been identified with the policy reforms of 1991 in India.
The Important Reform Measures (Step Towards liberalization privatization and Globalization)
Indian economy was in deep crisis in July 1991, when foreign currency reserves had plummeted
to almost $1 billion; Inflation had roared to an annual rate of 17 percent; fiscal deficit was very
high and had become unsustainable; foreign investors and NRIs had lost confidence in Indian
Economy. Capital was flying out of the country and we were close to defaulting on loans. Along
with these bottlenecks at home, many unforeseeable changes swept the economies of nations in
Western and Eastern Europe, South East Asia, Latin America and elsewhere, around the same
time. These were the economic compulsions at home and abroad that called for a complete
overhauling of our economic policies and programs. Major measures initiated as a part of the
liberalization and globalization strategy in the early nineties included the following:
Devaluation: The first step towards globalization was taken with the announcement of the
devaluation of Indian currency by 18-19 percent against major currencies in the international
foreign exchange market. In fact, this measure was taken in order to resolve the BOP crisis
Disinvestment-In order to make the process of globalization smooth, privatization and
liberalization policies are moving along as well. Under the privatization scheme, most of the
public sector undertakings have been/ are being sold to private sector.

Advantages of Globalization:

Resources of different countries are used for producing goods and services they are able to
do most efficiently.
Consumers to get much wider variety of products to choose from.
Consumers get the product they want at more competitive prices.
Companies are able to procure input goods and services required at most competitive
prices.
Companies get get access to much wider markets
It promotes understanding and goodwill among different countries.
Businesses and investors get much wider opportunities for investment.
Adverse impact of fluctuations in agricultural productions in one area can be reduced by
pooling of production of different areas.
Disadvantages of Globalization:
Developed countries can stifle development of undeveloped and under-developed
countries.
Economic depression in one country can trigger adverse reaction across the globe.
It can increase spread of communicable diseases.
Companies face much greater competition. This can put smaller companies, at a
disadvantage as they do not have resources to compete at global scale.

 Other things to consider:

* Reduces international poverty
* Contributes to the spread of technology
* Adds to the profitability of companies and corporations
* Builds stronger trade ties and dependencies between nations
* Major motivation for moving overseas is to exploit more lax labor laws and low
environmental standards
* Homogenizes the world culture, both positively and negatively
* Destroys entire industries in developed countries (e.g. US automakers, textile
manufacturing)

Advantages of Globalisation

Globalisation helps in brinign whole wolrd as one village. Every consumer have free and
frquent reach to the products of foreign countries.
Optimum use of natural resources possible.
Helpfull in cost reduction by eliminating cross border duties and fees
Helpful in employment generation and income generation
Disadvantages
Globalisation is direct attack on local tiny and small industry.
Global companies with hi-fi infrastructure almost ruins the local traditional small and
medium industries
Increases cut throat competition.
Globalisation increases monopoly by countries equiped with know-how and power.
Good sides

Globalization lets countries do what they can do best. If, for example, you buy
cheap steel from another country you dont have to make your own steel. You can focus
on computers or other things.

Globalization gives you a larger market. You can sell more goods and make more money.
You can create more jobs.

Consumers also profit from globalization. Products become cheaper and you can get
new goods more quickly.
Bad sides

Globalization causes unemployment in industrialized countries because firms move

their factories to places where they can get cheaper workers.

Globalization may lead to more environmental problems. A company may want to

build factories in other countries becauseenvironmental laws are not as strict as they are at

home. Poor countries in the Third World may have to cut down more trees so that they can sell
wood to richer countries.

Globalization can lead to financial problems . In the 1970s and 80s countries like Mexico,
Thailand, Indonesia or Brazil got a lot of money from investors who hoped they could build
up new businesses there. These new companies often didnt work, so they had to close
down and investors pulled out their money.

Some of the poorest countries in the world, especially in Africa, may get even poorer.
Their population is not as educated as indeveloped countries and they dont have the new
technology that we do.

Human, animal and plant diseases can spread more quickly through globalization.

Many experts say that we need a different kind of globalization in our world today. There must be
ways to make sure that all countries profit from the good sides of globalization. We should help
poorer countries by giving them better education and showing them how new technology works.
Every year, leaders of the worlds biggest industrial countries get together to
discuss economic problems. This meeting is called the G8 summit. In the last few years groups
against globalization have organized protest marches and demonstrations to point out that not
everyone is happy with how the worlds economy is developing.
THE TOP 4 GLOBALIZATION ADVANTAGES
1. Globalization Increases Free Trade
Globalization has increased the free trade between countries. The increases capital liquidity has
allowed investors in well developed nations to invest in developing countries. Huge corporations
from developed nations have great flexibility to operate in other countries.
2. Global Mass Media Ties World Together
The increased flow of communication has allowed global mass media to tie the world together.
Global mass media has allowed vital information to be shared between corporations and
individuals around the world. Globalization has also contributed to greater speed and ease of
transporting goods and people.
3. Eradicates Cultural Barriers
Countries joining together economically through politics and education have reduced and can
even eradicate cultural barriers, and increase the global village effect. Globalization has seen to be
the medium to spreading of democratic ideals to well developed nations and greater independence
to developing countries in the Global South.

4. Reduction Of War
Reduction of war between well developed nations is probably one of the primary benefits of
globalization.
THE TOP 3 GLOBALIZATION DISADVANTAGES
1. Decrease Environmental Integrity
Globalization has the potential to decrease the environmental integrity as polluting corporations
from well developed countries can take advantage of developing nations weak regulatory rules.
2. The Seek For Cheap Labor
Globalizations increases of non-skilled and skilled jobs from developing nations to well
developed countries as huge corporations seek for cheap labor. This economic trend can also
increase the likelihood of economic disrupt in a single nations, which could affect all nations.
3. Limits Cultural Expressions
Globalization imposes threat to mass media being controlled by huge corporations. This could
limit the cultural expressions. This means that mass media can be used by handful corporations to
pose risks in the cultural heritage of both well developed and developing nations.
Globalization is a global economical trend that is here to stay. It has advantages and
disadvantages, and these things will not disappear. People just need to know how to reap its
benefits and reduce its risks. People must understand its impact globally, and work altogether to
remedy the problems that may arise in the future. All countries in the Global North and Global
South must work altogether to spread its benefits.

Globalization

What

is

Globalization?

Globalization means the coming together of different societies and economies via
cross border flow of ideas, finances, capital, information, technologies, goods and services. The
cross border assimilation can be social, economic, cultural, or political. But most of the people
fear cultural and social assimilation as they believe this would have a negative impact on the
existing culture of their society. Globalization therefore has mostly narrowed down to economic
integration and this mainly happens through three channels; flow of finance, trade of goods and
services and capital movement.
Globalization is a term that includes a wide range of social and economic variations. It
encompasses topics like the cultural changes, economics, finance trends, and global market
expansion. There are positive and negative effects of globalization - it all comes as a package.
Globalization helps in creating new markets and wealth, at the same time it is responsible for
extensive suffering, disorder, and unrest. The great financial crisis that just happened is the
biggest example of how negative globalization can turn. It clearly reveals the dangers of an
unstable, deregulated, global economy. At the same time, this gave rise to important global
initiatives, striving towards betterment. Globalization is a factor responsible for both repression
and the social boom.

Globalization in India
Globalization has had a huge impact on the Indian economy. Globalization affected the Indian
economy both positively and negatively.
India's economy opened up during the early nineties. The policy measures on the domestic front
demanded that there was a requirement of multinational organizations to set up their offices here.
The market became more open and the economy started responding to the external (global)
market. The direct impact of globalization was directly seen on the GDP of the country which
increased significantly.
The liberalization of the Indian economy along with globalization helped the country to step up
its GDP growth rate considerably. The GDP growth rate picked up instantly from 5.6 percent in
1990-91 to 77.8 percent in 1996-97. Since then the growth rate did manage to slump down due to
drought and other factors but the country still managed to survive in the rat race and maintained a
GDP growth of about 5 to 6 percent. Today India is regarded as being the one of the fastest
developing countries just after China.
Globalization has also played a major role in generating employment opportunities in India. After
liberalization in the 1990s, the scenario of employment in India has witnessed a phenomenal
change. Cities like Bangalore, Delhi, Mumbai and Chennai provide employment to a chunk of the
Indian population since it is in these cities only that most foreign companies have set up their
operations.

Impact of Globalization
It was in July 1991, when foreign currency reserves had tumbled down to almost $1
billion; inflation was at a soaring high of 17%, highest level of fiscal deficit, and foreign investors
loosing confidence in Indian Economy. With all these coupling factors, capital was on the verge

of flying out of the country and we were on the brink of become loan defaulters. It was at this
time that with so many bottlenecks at bay, a complete overhauling of the economic system was
required. Policies and programs changed accordingly. This was the best time for us to realize the
importance of globalization.
India welcomed globalization with open arms, the result of which can be seen clearly. India's
Export and Imports have grown significantly over the last two decades. Quite a large number
of Indian companies have made a reputation for themselves on the global scenario. India has
become a one a stop destination for many services specially related to IT and IT support.

Measures of Globalization
1.

Devaluation: The first initiative towards globalization had been taken the moment there
was an announcement of devaluating the Indian currency by a hoping 18-19% against all the
major global currencies. This was a major initiative in the international foreign exchange arena.
The Balance of payment crisis could also be resolved by this measure.

2.

Disinvestment: The core elements of globalization are privatization and liberalization.

Under the privatization scheme, bulk of the public sector undertakings have been/ and are still
being sold to the private sector. Thus the concept of PPP (public private partnership) came up.

3.

Allowing Foreign Direct Investment (FDI): Allowing FDI inflows is a major step of
globalization. The foreign investment regime has been quite transparent and thus the economy is
getting boosted up. Various sectors were opened up for liberalizing the FDI regime.

Disadvantages

of

Globalization

Along with its many benefits globalization also comes with some negative effects. One of the
major concerns of globalization is that it leads to unequal distribution of income within the
country, the second fear is that globalization hampers the domestic policies of the country,
Globalization also increases the risk of spreading of communicable diseases, monopoly can also
set in with globalization and lastly outsourcing of jobs to the developing nations only results in
the
loss
of
jobs
for
the
developed
nations.