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Globalization Trends in India

Globalization refers to the increasing integration and interdependence of world economies, societies, and cultures due to reduced costs of trade, communication, and transportation. It accelerated in the late 20th century due to advances in technology and policy changes. India embraced globalization in the 1990s through economic liberalization policies known as LPG - liberalization, privatization, and globalization. This opened India's markets to foreign investment and trade. While globalization led to strong GDP growth in India and cultural exchange worldwide, it also brought challenges like job losses in some countries and threats from multinational corporations.

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987 views2 pages

Globalization Trends in India

Globalization refers to the increasing integration and interdependence of world economies, societies, and cultures due to reduced costs of trade, communication, and transportation. It accelerated in the late 20th century due to advances in technology and policy changes. India embraced globalization in the 1990s through economic liberalization policies known as LPG - liberalization, privatization, and globalization. This opened India's markets to foreign investment and trade. While globalization led to strong GDP growth in India and cultural exchange worldwide, it also brought challenges like job losses in some countries and threats from multinational corporations.

Uploaded by

Abu Bashar
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOC, PDF, TXT or read online on Scribd
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Globalization

The human society around the world, over a period of time, has established greater
contact, but the pace has increased rapidly since the mid 1980’s.The term globalization
means international integration. It includes an array of social, political and economic
changes. Unimaginable progress in modes of communications, transportation and
computer technology have given the process a new lease of life.

The world is more interdependent now than ever before .Multinational companies
manufacture products across many countries and sell to consumers across the globe.
Money, technology and raw materials have broken the International barriers. Not only
products and finances, but also ideas and cultures have breached the national boundaries.

Laws, economies and social movements have become international in nature and not only
the Globalization of the Economy but also the Globalization of Politics, Culture and Law
is the order of the day. The formation of General Agreement on Tariffs and Trade
(GATT), International Monetary Fund and the concept of free trade have boosted
globalization.

Globalization in India

In early 1990s the Indian economy had witnessed dramatic policy changes. The idea
behind the new economic model known as Liberalization, Privatization and Globalization
in India (LPG), was to make the Indian economy one of the fastest growing economies in
the world. An array of reforms was initiated with regard to industrial, trade and social
sector to make the economy more competitive.

The economic changes initiated have had a dramatic effect on the overall growth of the
economy. It also heralded the integration of the Indian economy into the global economy.
The Indian economy was in major crisis in 1991 when foreign currency reserves went
down to $1 billion and inflation was as high as 17%. Fiscal deficit was also high and
NRI's were not interested in investing in India. Then the following measures were taken
to liberalize and globalize the economy.

Steps Taken to Globalize Indian Economy

Some of the steps taken to liberalize and globalize our economy were:

1. Devaluation: To solve the balance of payment problem Indian currency were


devaluated by 18 to 19%.

2. Disinvestment: To make the LPG model smooth many of the public sectors were sold
to the private sector.
3. Allowing Foreign Direct Investment (FDI): FDI was allowed in a wide range of
sectors such as Insurance (26%), defense industries (26%) etc.

4. NRI Scheme: The facilities which were available to foreign investors were also given
to NRI's.

Merits and Demerits of Globalization

The Merits of Globalization are as follows:

• There is an International market for companies and for consumers there is a wider
range of products to choose from.
• Increase in flow of investments from developed countries to developing countries,
which can be used for economic reconstruction.
• Greater and faster flow of information between countries and greater cultural
interaction has helped to overcome cultural barriers.
• Technological development has resulted in reverse brain drain in developing
countries.

The Demerits of Globalization are as follows:

• The outsourcing of jobs to developing countries has resulted in loss of jobs in


developed countries.
• There is a greater threat of spread of communicable diseases.
• There is an underlying threat of multinational corporations with immense power
ruling the globe.
• For smaller developing nations at the receiving end, it could indirectly lead to a
subtle form of colonization.

Summary

India gained highly from the LPG model as its GDP increased to 9.7% in 2007-2008.
• In respect of market capitalization, India ranks fourth in the world.
• But even after globalization, condition of agriculture has not improved.

• The share of agriculture in the GDP is only 17%.


• The number of landless families has increased and farmers are still committing
suicide. But seeing the positive effects of globalization, it can be said that very
soon India will overcome these hurdles too and march strongly on its path of
development.

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