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Globalisation in India

Essay by   •  August 16, 2012  •  Research Paper  •  1,911 Words (8 Pages)  •  1,594 Views

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Contents Page

Introduction....................................................... 3

Globalisaton in india............................................. 3

Globalisation......................................................... 4

Impacts of globalisation......................................... 5

Conclution................................................................ 9

References................................................................. 9

Introduction

World is becoming so small because of the growing integration of different economies and societies around the world .One of the most debated topics in international economics over the past few years is rapid growth and poverty reduction in India,Chaina and other countries that were poor 20 years ago, has been a positive aspects of globalisation. But globalisation has some amount of negative impacts as well. Liberalisation of trade and finace, changes how companies work, and improvement of transport and communications. Since 1955,the volume of the world trade has grown much faster than the world economy as a whole, and for many countries using engine for growth. Because of that it has increased inequality among countries around the world, the gain of trade have been unevenly distributed, as first Europeans then Asians countries joined the world trading system. Other regions, such as Afirica,dependent on commodities, have been left behind, countries which concentrated on export-led growth(japan,korea,China) have benefited , Other developing countries also experienced the globalisation in early nineties. Manufacturing of goods methods also changed dramatically in the last 50 years because of low cost of transport and communications. More and more goods are produced by global multinational companies with production plants around the world. This help them to gained advantage of cheap labour and give them better access to local markets.

Globalisation in India

India one of the most dramatically improving economy among the developing countries. As it opened up the economy in the early nineties had became global economy. The good produced in India had long been exported to far off destinations across the world there for the concept of globalising is hardly new to India. it was traditionally protected economy for many years after independence. The government of india, however, ruled and regulated Indian markets but with the globalisation and liberalisation of the Indian economy, the whole market scenario changed in no time. The economic policy drafted in early 1990s by the government of India facilitated huge inflow of foreign direct investment and foreign institutional investors in to the much insulated Indian markets.India also having positive and negative impacts of globalisation. Before evaluating that better understanding of globalisation is important.

Globalisation

Globalisation is explain to the global relationships of culture, people and economic activity. Economic globalisation is the global distribution of production of goods and services, by the reduction of barriers to international trade such as import quotas, export fees and tariffs. Globalisation leads to the economic growth in developed and developing countries through specialisation and the competitive advantages.

. Guy Brainbant: says that the process of globalisation not only includes opening up of world trade, development of advanced means of communication, internationalisation of financial markets, growing importance of Multinational companies, population migrations and more generally increased mobility of persons, goods, capital, data and ideas but also infections, diseases and pollution.

Different aspects of globalisation

In 2000 the IMF identified four basic aspects of globalization

Impacts of globalisation

Impact of globalisation for a country may vary from another country .ITS depend on the courtiers' political,environmental,social and cultural (PEST)factors. When we look them under PEST environment Globalisation has positive and negative impact.

Positive impacts of globalisation in India

ECONOMIC AND POLITICAL FACTORS

Gross domestric production(GDP) increasing:

In India globalisation gave a favourable impact on overall growth rate of economy. In 1970's GDP 3% of low growth raised by double in 1980's (GDP5.9%).But other countries such as Brazil, Indonesia,Korea and Mexico was more then towice that of india in 1970's. and they maintained high growth rate than india in 1980s as well.

ButGDP growth rise has improve the india's global position in world market.In 1991 india was in 8th position, it incresed to 4t position in 2001(when te GDP calculated on a purchasing power parity basis).

Changes in structure of the economy:

Globalisation not only increased the GDP of India but also direction of growth in the sectors also changed. Before globalisation most of the GDP in the economy generated from the primary sectors but now service industry is contributing the maximum part of the GDP.More than 57% of GDP contributed by services sector

Foreign direct investment(FDI) inflows increasing:

Firms invest in another country to gain cheaper wages. Normally firms invest by buying a company or expanding operations of existing business in the country.

India had highly regulated foreign direct investment regime to protect its economy and to achieve self-reliance but India didn't lose the control as other emerging markets like china. Now India is the second most important FDI destination (after china) for transnational corporations during 2010-2012.

The free movements of goods increase the flow of money (capital) around the world. Banks and private investors now hold trillions of assets invested overseas because of globalisation of world capital market. These capital

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