Impact of Globalisation on Indian economy
The advancement of technology has altered the way people live. Everything in modern times is accessible with a single click. This, however, was not the situation a few decades ago. Trade and investment across international borders were scarce and the globe was not open. Impact of Globalisation on the Indian economy, however, overturned this notion. It encouraged international investment and aided swift national development. Through the advantages of globalisation, developing nations like India boosted their economies. Globalisation and the Indian economy are thus closely connected.
What is Globalisation?
When a country’s economy is integrated with the global economy, it is referred to as globalisation. The subject has several dimensions. It is the culmination of numerous initiatives aimed at moving the globe toward greater interconnectedness and integration.
It involves building networks and pursuing endeavours that break through social, economic, and geographic barriers. Globalisation works to establish connections so that things happening far away can influence what happens in India.
In other terms, globalisation is the process by which individuals, businesses, and governments interact and unite globally.
How does globalisation impact the economy?
India is one of the nations that has greatly prospered since the beginning and introduction of globalisation. In the corporate, retail, and scientific sectors, there has been a tremendous increase in foreign investment.
Additionally, it had a significant impact on social, financial, cultural, and political spheres. Due to advancements in information technology and transportation, there has been a surge in globalisation in India recently. Impact of Globalisation on the Indian economy brought growth in worldwide trade, doctrines, & culture are results of enhanced global synergy.
Globalisation and the Indian economy
Following urbanisation and globalisation in India, society is undergoing significant change. The fundamental structure of the economy has been directly shaped by economic policy.
Government-created and -managed economic policies were crucial in determining the levels of societal savings, jobs, income, & investments.
One of the most significant impact of globalisation on Indian society is cross-country culture. It has had a tremendous impact on the nation’s cultural, societal, political, & economic characteristics.
The primary component, however, that transforms a nation’s economy into a global economy is economic globalisation.
Positive impact of globalisation on indian economy
- Increased employment: The creation of special economic zones (SEZ) has resulted in a rise in the number of new jobs accessible. For the purpose of hiring thousands of workers, such as the export processing zones (EPZ) unit in India is quite helpful.
Another advantage of India is the low cost of labour. The large corporations in the west are encouraged by this trait to hire workers from other areas, which leads to an increase in employment.
- Compensation raise: As a result of globalisation, international corporations are now paid more than domestic enterprises since they offer more expertise and knowledge. The managerial structure changed as a result of this opportunity as well.
- High living standards: The economy of India and people’s quality of life have improved as a result of the rise of globalisation. The Impact of Globalisation on the Indian economy was to such an extent that the shift is visible in a person’s purchasing habits, particularly among those who work for overseas corporations. As a result, many communities are experiencing improved living conditions as well as business growth.
- Rising per-capita income: After globalisation, the per-capita income of Indian consumers also rose as a direct result of additional work options. As a result, it raised the typical India’s purchasing power and changed their way of living. This resulted in the emergence of a new middle class and a rise in the demand for consumer goods in this nation.
- Increasing Consumer Options: The Indian economy and globalisation gave consumers a wide range of options. Indian and foreign manufacturers each presented a variety of the same type of product, allowing customers to choose the one they liked best. Manufacturers were forced to provide superior goods at much cheaper prices as a result of the increased competition.
- Entry to Undiscovered Markets: An enormous impact of globalisation is that it opens doors to a variety of underserved markets with enormous potential. Foreign businesses are now able to operate in the Indian market thanks to the globalisation in India. Additionally, Indian companies had the chance to conduct business internationally. As a result, after 1991, India’s import-export industry had an astounding growth. Globalisation and the Indian economy are an essential part of economics. It provides insight into how this idea changed India as a nation and provides a clear image of globalisation and the Indian economy’s future.
What are the negative impacts of globalisation on the Indian economy?
- Trade deficits, like the one in India, affect developing and underdeveloped economies the most and exacerbate the gap between them and more developed ones.
- Outsourcing of employment from industrialised to developing nations. In wealthy nations, it has resulted in employment losses and consequent protectionist measures, as seen most recently in the USA and Saudi Arabia.
- Due to the interdependence of the world’s economies, any financial meltdown in a rich nation, notably, would cause underdeveloped nations’ economies to slow down. Eg- crisis in COVID 19 times
- Agriculture hasn’t progressed as much as the service and manufacturing sectors, and it’s getting more and more expensive.
- The government is reducing its involvement in agriculture.
- Growth that is not sustainable and development that increasingly disregards the environment, forests, wildlife, etc.
- Conventional service providers are being destroyed. For instance, Mc Donald’s, Chinese restaurants, etc. have taken the place of outdated eateries that served parathas and lassi.
- Emergence of a culture of consumer credit. Even if a person does not have enough money to buy what they want, they can still buy it now.
Conclusion:Impact of Globalisation on Indian economy
There was considerable conflict when the phrase “globalisation” and impact of globalisation entered the conversation, and India was not an exception. One of the main causes was that Indians believed that globalisation would bring forth cutting-edge technology advancements that would ultimately result in mass unemployment.
In actuality, though, the objective was to integrate technology advancements without sacrificing the human touch. The ultimate goal of combining the best of human resources and technology is still in place today.
Another group had the same view, arguing that globalisation would cause prices for goods and necessities to rise unreasonably, putting pressure on people’s purchasing power. However, in practice, globalisation aimed to reduce the cost of every good by bringing in ideas and know-how from other frontiers based on their best availability and local presence.