UNIT-I

Introduction to Business Environment

“Globalization of Indian Business”

 Learning Outcomes
At the end of this lecture, you will be able to…

• Understand the concept of Globalization

 Know the features and Types of Globalization

 Describe the pros and cons of Globalization

 Examine Globalization in Indian Economy

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Introduction

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 What is Globalization?
• The term Globalization refers to the integration of the economy of the
nation with the world economy. It is a multifaceted aspect. It is a result of
the collection of multiple strategies that are directed at transforming the
world towards a greater interdependence and integration.

• It includes the creation of networks and pursuits transforming social,

economical, and geographical barriers. Globalization tries to build links in
such a way that the events in India can be determined by the events
happening distances away.

• Globalization is the method of interaction and union among people,

corporations, and governments universally.
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 Operating & Expanding business globally

Erasing the difference b/w domestic and foreign market

Trading goods & Services between countries

Establishing manufacturing & distribution facilities in

Features of different countries based on feasibility and validity
Globalization
Sourcing of factors of production globally

Global orientation in strategies, culture & managerial

expertise

Setting the mind & attitude towards entire globe as a single

market place
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Debate on Globalization

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Types of Globalization

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 Video on Globalization

• https://www.youtube.com/watch?v=KMkJu8S8ztE
 Boeing 787
• Its wings and batteries come from Japan.
• Its wing tips come from South Korea.
• India is the source of its floor beams.
• The front fuselage is made in the USA and Japan.
• The center fuselage and horizontal stabilizers are
from Italy.
• Landing gear and doors? France.
• Cargo access doors are built in Sweden.
• The movable trailing edge of the wings are from
Canada.
• Thrust reversers come from Mexico.
• Its engines come from either General Electric in
the US or Rolls-Royce in the UK.
Pros and Cons of Globalization

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 INDIA - An Emerging Market

• India is one of the largest and fastest growing markets in the world.

• India is the most populous nation in the world

• Although the per capita income of India is low, the size of Gross National
Income is large.

• In Purchase power parity terms, India is the second largest economy in

the world and it is estimated that by 2030, it will be the second largest
after China.

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 Effect of Globalization in India
• India is one of the countries that succeeded significantly after the initiation
and implementation of Globalization.

• The growth of foreign investment in the field of corporate, retail, and the
scientific sector is enormous in the country.

• It also had a tremendous impact on the social, monetary, cultural, and

political areas. In recent years, Globalization has increased due to
improvements in transportation and information technology.

• With the improved global synergies, comes the growth of global trade,
doctrines, and culture.
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 Globalization in the Indian Economy
• Indian society is changing drastically after urbanization and globalization. The
economic policies have had a direct influence in forming the basic framework
of the economy.
• Economic policies established and administered by the government also
performed an essential role in planning levels of savings, employment, income,
and investments in the society.
• Cross country culture is one of the critical impacts of globalization on Indian
society. It has significantly changed several aspects of the country, including
cultural, social, political, and economical.
• However, economic unification is the main factor that contributes maximum to
a country’s economy into an international economy.
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Government’s Measures towards Globalization

The GOI has taken the following measures in order to globalize the Indian
economy:
• Removing constraints and obstacles to the entry of MNCs into India by diluting and finally
scrapping restrictive laws like Foreign Exchange and Regulation Act, 1973 (FERA). The
Foreign exchange Management Act (FEMA) has been passed by deleting the clauses
which restricted the entry of MNCs.
• Permitting Indian companies to collaborate with foreign companies in the form of foreign
joint ventures (FJVs).

• Establishing of FJVs by Indian companies in various foreign countries.

• World Bank advocated import liberalization. Consequently the GOI reduced the import
tariffs to 15 per cent. 16
Government’s Measures towards Globalization

• Eliminating various import duties and drastic reduction of other import duties.
• Removing export subsidies.
• Replacing licensing of exports with duties.

• Liberalizing the inflow of FDI.

• Offering incentives to MNCs and NRIs (Non-resident Indians) to invest in India.

• Allowing foreign institutional investors (FIIs) to invest in the Indian capital Market.

• Allowing the Indian mutual funds to invest in foreign companies.

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 Positive effects of Globalization

• Industrial • Foreign Trade

• Financial • Spread of Education
• Economic • Informational
• Political • Cultural
• Increased competition • Ecological
• Employment • Social
• Investment and Capital flows • Transportation
• Legal / Ethical • Technical

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 Quiz

• The interrelated factors that have driven globalization in the recent

past are:

(a) Increased international trade.

(b) The growth of multinational corporations
(c) The internationalization of finance
(d) All of the above
 Article on Globalization

Link:
• https://www.legalservicesindia.com/article/1018/Globalization-&-its
-impact-on-Indian-Economy:-Developments-and-Challenges.html

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Any Questions
Thank You