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Globalization is a term that includes a wide range of social and economic variations. It can encompass topics like the cultural changes, economics, finance trends, and global market expansion. There ought to be 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.
What happens when there is a growing integration of economies across the globe? Majorly there have been positive impacts of this global phenomenon - through liberalization, privatization and globalization (LPG). Due to globalization, there has been significant flow of inward foreign direct investment. MNCs are getting a chance to explore various different markets across economies and explore the untapped potential.
Globalization and India
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. Due to globalization, contacts have been developed all across the globe, with the pace of integration dramatically increasing.
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.
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
Thus the concept of PPP (public private partnership) came up. Various sectors were opened up for liberalizing the FDI regime. etal underneath the application. Disinvestment: The core elements of globalization are privatization and liberalization. Under the privatization scheme. 2. cement. textile. The ultimate inference being that globalization hasn't shown positive results. Globalization means the dismantling of trade barriers between nations and the integration of the nations economies through financial flow. The various beneficial effects of globalization in Indian Industry are that it brought in huge amounts of foreign investments into the industry especially in the BPO. petroleum. trade in goods and services. Globalization has increased across the world in recent years due to the fast progress that has been made in the field of technology especially in communications and transport. globalization of the Indian Industry took place on a major scale. The benefits of the effects of globalization in the Indian Industry are that many foreign companies set up industries in India. Is globalization delivering all the desired results to the masses? Or only a few can feel the benefits of globalization? Figures have out rightly proved that the global average per capita income showed a strong surge throughout the 20th century but the income gap between rich and poor countries have not been bridged for many decades now. The government of India made changes in its economic policy in 1991 by which it allowed direct foreign investments in the country. pharmaceutical. petroleum. Allowing Foreign Direct Investment (FDI): Allowing FDI inflows is a major step of globalization. This was a major initiative in the international foreign exchange arena. This helped reduce the level of unemployment and poverty in the country. manufacturing. chemical. bulk of the public sector undertakings have been/ and are still being sold to the private sector. Globalization of the Indian Industry took place in its various sectors such as steel. they boosted the Indian economy quite significantly. and corporate investments between nations. and BPO. Effects of Globalization on Indian Industry started when the government opened the country's markets to foreign investments in the early 1990s.global currencies. and chemical sectors and this helped to provide employment to many people in the country. BPO. retail. As a result of this. and manufacturing industries. pharmaceutical. petroleum. The Balance of payment crisis could also be resolved by this measure. especially in the pharmaceutical. Also the benefit of the Effects of Globalization on Indian Industry are that the foreign companies brought in highly advanced technology with them and this helped to make the Indian Industry more . As huge amounts of foreign direct investments were coming to the Indian Industry. 3. The foreign investment regime has been quite transparent and thus the economy is getting boosted up.
In other words at this rate of increase the quantum of India's manufacturing exports will cross the . The introduction and the subsequent development of globalization of the Indian manufacturing sector respectively helped India to shed its age old tag of being 'an agriculture based country'. and steel industries. and cement industries. With the foreign goods being better than the Indian goods. electrical. The negative Effects of Globalization on Indian Industry are that with the coming of technology the number of labor required decreased and this resulted in many people being removed from their jobs. automobile. The widespread acceptance and development of globalization of the Indian manufacturing sector effected astronomical growth of this industry.technologically advanced. telecommunication hardware. Furthermore. manufacturing. The effect of globalization of Indian manufacturing industry is reflected in the GDP's share of Indian manufacturing sector which has grown considerably over the years. textiles. the contribution of the Indian manufacturing sector to the Indian export sector has increased from 52% in 1970 to 59% in 1980 and 71% in 1990 and 77% in 2000-01. Globalization of Indian Manufacturing Sector The initiation and development of globalization of the Indian manufacturing sector took place simultaneously in the 1990s. pharmaceutical. the consumer preferred to buy the foreign goods. etc. The government of India must try to make such economic policies with regard to Indian Industry's Globalization that are beneficial and not harmful. Further.38% in 1991 to 27% in 2004. manufacturing. chemical. electronic. biotechnology. This reduced the amount of profit of the Indian Industry companies. India exports manufactured products worth about US$ 50 billion and a recent study on Indian manufacturing industry has forecast an annual growth of 17% by the end of the year 2015. This happened mainly in the pharmaceutical. The main growth driver of the Indian manufacturing sector are Information Technology and hardware. chemical. The effects of globalization on Indian Industry have proved to be positive as well as negative. This happened mainly in the pharmaceutical. the Indian manufacturing exports accounted for a little over 5% (in 1990) of the value of output of the Indian manufacturing sector but today it is close to 10%. infrastructure. The share of Indian manufacturing industry towards India GDP has grown from 25. The various negative Effects of Globalization on Indian Industry are that it increased competition in the Indian market between the foreign companies and domestic companies.
00. like the following y Use of primitive technology or under utilization of technology .US$ 300 billion mark by the end of the financial year 2015. The Indian sectors which grew tremendously as a result of globalization of the Indian manufacturing sector are as follows y y y y y y y y y y y y y y y Capital goods Engineering goods Chemicals Petroleum Chemicals & fertilizers Packaging Consumer non-durables Electronics IT Hardware & peripherals Gems & jewelry Leather & leather products Mining Steel & non-ferrous metals Textiles & apparels Water equipment The positive effect of the globalization of the Indian manufacturing sector can be corroborated from the following facts y y y y y y y y y y y The Indian industrial growth exceeded 10% Manufacturing growth rate exceeded 12 % Manufacturing of consumer durables and non-durables have also recorded upswings Telecommunication sector with inflows of US$ 405 million has registered the maximum growth of 950% Merchandise exports recorded strong growth The automotive industry achieved a growth rate of over 20% in 2006-07 The biotechnology industry witnessed another good year in 2006-07 and registering more than 40% of growth The US$ 47 billion Indian textile industry is expected to grow to US$ 115 billion by the year 2012 The US$6. and electrical and electronic equipment sectors. the process of globalization of the Indian manufacturing sector have contributed immensely for the overall development of the Indian economy but it still suffers from some bottlenecks.4 billion Indian retail industry is expected to grow over 20% annually to US$ 23 billion by 2010 The robust pharmaceutical market in India ranks 4th worldwide and is expected to cross business worth Rs 1. Most of this business would be in the domain of auto components. apparel. specialty chemicals. pharmaceutical.000 crore in formulations and bulk drug production by 2010 Although.
To ensure elimination of the abovementioned aberrations form the Indian manufacturing sector the government of India must focus on areas like improving the urban infrastructure. increased investment in R&D and support of SMEs. The Indian manufacturing sector is successfully competing in the global marketplace and registering high growth on year-on-year basis since the 1990s. ensuring fair competition and access to markets. reduction of import duties. quality improvements in vocational and higher education.y y y Poor infrastructure Over staffed operations Expensive financing and bureaucracy India is slowly shedding its image from being an agriculture based country to a manufacturing based country and thus the above-mentioned bottlenecks should be immediately arrested and eradicated to ensure further growth of this industry. . employment. The manufacturing industry is the backbone of any economy since it helps in the overall growth of productivity. The globalization of the Indian manufacturing sector has brought down the percentage of Indians living below poverty line from 40% to 25%. The astronomical growth in worldwide distribution systems and Information Technology. and it also strengthens agriculture and service sectors. coupled with opening of trade barriers. has led to stupendous growth of global manufacturing networks. designed to take advantage of low-waged yet efficient Indian work force.
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