Globalization in India: Effects
and Consequences
Subhankar Chatterjee
What is Globalization?
The term globalization means International Integration.
Opening up of world trade, development of advanced
means of communication, internationalisation of financial
markets, growing importance of MNC's, population
migrations and more generally increased mobility of
persons, goods, capital, data and ideas.
It is a process through which the diverse world is unified into a
single society.
Wave of Globalization
The wave of globalization hitted India at the end of the last century
and still the country is flowing with the current of global changes.
Economic Impact of globalization in India
Multilateral agreements in trade, taking on such new agendas as
environmental and social conditions.
New multilateral agreements for services ,Intellectual properties,
communications, and more binding on national governments than any
previous agreements.
Market economic policies spreading around the world, with greater
privatization and liberalization than in earlier decades.
Growing global markets in services. People can now execute
trade services globally -- from medical advice to software writing to
data processing , that could never really be traded before.
Open Market policy -advantages
Growing Indian Economy
2010
GDP USD 1.36 trillion
GDP growth rate 9%
Services contribution
60-65%
Balance of Trade Negative
balance should increase with
surging imports versus exports
Investment goal
USD 370 billion
2008
GDP USD 1.16 trillion
GDP growth rate 9.5%
Services contribution 60%
Balance of Trade Negative
balance should increase with
surging imports versus exports
Investment goal
USD 305 billion
2006
GDP USD 590 billion
GDP growth rate 9%
Services contribution 54%
Balance of Trade
USD (-)46.2 billion
Investment goal
USD 250 billion
Growing GDP
1.200
USD Billion
1.000
800
682
600
398
400
191
200
0
103
105
453
237
125
105
1999-00
2002-03
Agriculture
204
231
135
145
2005-06
Industry
2006-07
Services
287
167
2010*
Source: India Brand Equity Foundation (IBEF)
Growing Exports
200
210
155
USD Billion
170
126.3
130
103.1
83.5
90
50
2004-05
2005-06
2006-07
2007-08*
2008-09*
Source: Ministry of Commerce & IBEF
Growing FDI Inflows
35
30
30
USD Billion
25
22
20
15
10
5
8.9
4.3
0
2003-04
2004-05
2005-06
2006-07*
2007-08*
India is ranked second in AT
Kearneys FDI confidence index
(2007)
Source: Ministry of Commerce & IBEF
Indias economic position
among BRIC countries
Impact of globalization on business in India
India has a consumer base of 1.14 billion people.
India is the 3rd largest global telecom market. The mobile subscriber
base has grown from 0.3 Million in 1996 to over 250 million currently.
India is likely to add over 200 shopping malls by 2010 and 715
malls by 2015.
India is the worlds:
2nd largest two-wheeler market,
4th largest commercial vehicle market
11th largest passenger car market.
Expected to be the 7th largest automobile market by 2016.
Indian companies going Global
Buyer
Acquisition
Price
Mittal Steel
Arcelor,Luxembourg
US$ 26.5 bi
Reliance Industries
Flag Telecom, Bermuda
US$ 212mi
Tata Motors
Daewoo, Korea
US$ 118mi
Infosys Technologies
Expert Information Services, Australia
US$ 3.1mi
Bharat Forge
Carl Dan Peddinghaus, Germany
N/A
Ranbaxy
RPG (Aventis) Laboratories, France
N/A
Wockhardt
CP Pharmaceuticals, UK
US$ 18mi
Cadila Health
Alpharma SAS, France
US$ 5.7mi
Hindalco
Straits Ply, Australia
US$ 56.4mi
Wipro
NerveWire Inc, USA
US$ 18.5mi
Aditya Birla
Dashiqiao Chem, China
US$ 8.5mi
United Phosphorus
Oryzalin Herbicide, USA
US$ 21.3mi
Technological & Cultural impact of
globalization in India.
Access to television grew from 20% of the urban population (1991) to
90% of the urban population (2009). Even in the rural areas satellite
television has a grown up market.
In the cities Internet facility is everywhere .Extension of internet
facilities even to rural areas.
Global food chain /restaurants has already found a huge market in
the urban areas of India.
Lavish Multiplex movie halls, big shopping malls and high rise
residentials are seen in every cities.
Technological & cultural impact of
globalization in India
Telecommunication and Software Industries are booming in India.
Entertainment sector in India has a worldwide market.
Bollywood movies are distributed and accepted worldwide.Big
international companies(Walt Disney,20th Century Fox,Columbia
Pictures) are investing on this sector.
Famous International brands(Armani,Gucci,Nike,Omega etc.)
are investing in the Indian market with the changing of fashion
statement of Indians.
Impact of globalization on agriculture in India
Agriculture acquired 17% of Indias GDP in 2008.
60% of population still depends on agriculture for their livelihood.
Occupied 43% of Indias geographical areas.
Agriculture Scientists are applying new technologies and instruments
in growing crops.
Different state governments of India are taking initiative to literate the
farmers.
Impact of globalization on education in India
Literacy rate in India at present is 74.04%
Foreign Universities are collaborating with different Indian
Universities.
Year
Literacy Rate
Male Female
Person
Male
Female
Gap
1981
43.6
56.4
29.8
26.6
1991
52.2
64.1
39.3
24.8
2001
65.4
75.8
54.2
21.6
2010
74.04
82.4
65.46
16.94
Two different face of globalization in India.
Indias problem with Globalization
Some section of people in India,basically poor and very poor,tribal
groups,they did not feel the heat of globalization at all.They remain poor &
poorest as they were.
Increased gap between rich and poor fuels potential terrorist reaction.
Ethical responsibility of business has been diminished.
Youth group of India leaving their studies very early and joining Call
centres to earn easy money thereby losing their social life after getting
habituated with monotonous work.
High growth but problem of unemployment.
Multi party rule, hence political ideology intervenes globalization
(reservation, labor law reforms).
Price hike of every daily usable commodities.
What are people talking about India?
India has a fantastic pool of
software professionals. The
world needs to benefit from this.
Bill Gates, Microsoft
Chairman
India on its way to becoming
IT, manufacturing kingdom of
the world
Mr Yasukuni Enoki,
Japanese Ambassador to
India
The dynamism shown by India
in the last 15 years is
phenomenal
Paul Wolfowitz, ExPresident, World Bank
This market (India) is critical
to our plans for building a
Ford Motor Co. for the 21st
century
Bill Ford,
Chairman and
CEO
Conclusion
Flowing with globalization ,India is shining in nearly every
perspects.
India is getting a global recognition and slowly moving towards to
become a major economic and political strength.
Though the developement is progressing rapidly,still many basic
problems like rural poverty,corruption and political instability
remained unsolved.
Thank You
Acknowledgement
Websites:
Reserve Bank of India,
Ministry of Finance & Commerce,India
Indian chamber of Commerce
IBFF
IFFCO
IBN
Google Images.
