Impact of Globalisation on Indian Development
INTRODUCTION
India is known for its vibrant culture and rich heritage; it has experienced significant influences from the forces of globalisation. As the world becomes increasingly interconnected, the effects on the Indian economy that is the market and the industry have become significant. Globalization has been defined as the process of rapid integration of countries and happenings through greater foreign trade and foreign investment. It is the process of international integration arising from the interchange of world views, products, ideas, and other aspects of culture[1].
Factors aiding globalisation =
Globalisation in India is influenced by several factor, this has lad to its integration in the global economy. Here are the various causes of globalisation in India:
1. Advancement of technology- It has reduced the time taken for communication making it more advanced. As it has witnessed rapid advancement in ITC, particularly internet and mobile connectively. It has further reduced the hurdles faced to cross- border communication and trade and facilitates in the exchange of goods and information on a global scale.
2. Economic reforms – the 1991 reform in India has laid to the greater economic liberalisation, this was also known as the new economic policy. It has opened the Indian economy to foreign trade and investment and aimed at enhancing economic growth, attract foreign investment, capital and increase competition.
3. Trade liberalisation and improved transportation- its participation in the global trade agreement has increased its global presence and resulted in increasing its trade and market access, enhanced international trade and investment and reduction of trade traffic and import quota. The emergences of global market enabled the Indian companies to expand their reach by improving their transportation facilities, enabling them to export their goods and service to a broader customer base.
4. Rise of MNCs - India has become a well known among the multinational companies because of its skilled workforce. The MNCs seek to outsource their operations, making India famous, they outsource their operation in technical field. This has led to the integration of Indian companies into global value chains.
5. Global financial integration - Its’s integration into the global financial system has been directed by foreign portfolio investments and the involvement of the international banks. Cross-border capital flows have further contributed to these integrations, making it easier for India to access international finance.
Historical perspective on the impact of globalisation on the Indian economy =
India has a rich economic history dating back to the ancient times when it was famous as trading hub. During the colonial era, the British East Indian company initially known as the London east India company was granted power through the royal charter of 1661 issued by the queen Elizabeth II to establish its compony and it has further established its monopoly over the religion by largely controlling its economy and limiting trade to a few selected industries. Following its independence in 1947, it adopted a socialist economic model that aimed at achieving self- sufficiency and protecting domestic industries by limiting foreign investment and trade. Further in the early 1980s, India began to liberalise its economy by opening its door to the foreign investment and trade. This marked a pivotal shift in the economic policy, motivated by the need to modernize and diversify the economy, reduce budget deficit, and stimulate economic growth. The liberalisation of India’s economy was a major turning point, paving the way for increasing globalisation.
Impact of globalisation =
Globalisation has profound and multifaceted impact on Indian development, influencing various aspects of country’s economy, society and culture. They are as follows:
1) Economic impact ==
Economic growth- Globalizatio n has a profound economic impact on India, leading to rapid GDP growth, attracting foreign investment, diversifying exports, and creating employment opportunities. However, it has also brought challenges such as income inequality and the need for skill development to fully capitalize on these opportunities. These dynamics continue to shape India's economic landscape as it integrates further into the global economy.
i) Increased GDP: Since 1990s, when the economic liberalization policies were implemented, India has experienced rapid economic growth which has resulted in the sturdy growth of the GDP. These reforms opened the economy to international market, reducing trade barriers, and encouraged private sector investment and participation in the economy, leading to increased productivity and competition [2].
ii) Foreign direct investment: liberalisation policies played a pivotal role in the substantial increase in FDI. These has increased the capital inflow, technologies, and managerial expertise into the Indian economy, resulting in growth of economy and industries and creation of employment opportunities [3].
iii) Growth in export: India’s export has expanded significantly. Traditionally dominated by sectors like textiles and agriculture, it now exports a wide range of goods and service, including information technologies, pharmaceuticals and services [4].
iv) Import of technologies- India’s exposure to the global market has enabled it to import advanced technologies, enhancing productivity and competitiveness across the sector. This technological infusion has vital influence in India’s economic modernization [5].
v) Employment and labour market: globalisation has resulted in the creation of employment opportunities, particularly in IT and service sector this is due to the influence of foreign companies and the expansion of the domestic industries. Further there is increases in the mobility of the labour in India and across the border.
2) Social Impact ==
Globalisation has resulted in the growth of the economic activities which has in turn resulted in the improved standard of living and poverty reduction. The rise in the employment opportunities in the urban area and it and service sector has in turn played a vital role in uplifting the people from the poverty. Further government has implemented various social and welfare programmes aimed at poverty alleviation. Some of them are as follows: Mahatma Gandhi national rural employment guarantee act and Pradhan mantra Jan Dhan yojana, etc. all this help the aggrieved section of the society by targeting rural development and providing them with financial support. Globalisation has further highlighted the importance of education and healthcare, leading to improved access and increased investments in the educational and healthcare infrastructure. Some of the initiatives undertaken by the government of India are Sarva shikha Abhiyan, the right to education act and Ayushman Bharat. Urbanisation and exposure to global culture has led to the skill development and change in the lifestyle.
3) Cultural Impact ==
Globalization has resulted in the cultural exchange, bringing diverse culture influences into India while also spreading Indian cultural globally. The Indian film and music industries have played a vital role in spreading Indian cultural globally. Further exposure to global ideas has resulted in the shift of the social ideas and values, particularly involving ideas about gender equality and individual freedom. Increased consumerism and the proliferation of global brands have changed consumption habits and lifestyles. The rising middle class has led to higher demand for luxury goods and services, reflecting a shift towards more consumer- oriented lifestyles.
Challenges =
Along with the positive impact globalisation also have some of the negative impact like economic benefits have not been evenly distributed leading to income inequalities and regional disparities. Further agricultural sector has faced challenges due to competition from global markets. Globalisation has resulted in the erosion of traditional values and culture due to the influence of the western lifestyles and media. Further rapid urbanization and industrialization has led to greater exploitation of natural resources.
Conclusion =
Globalization has played a pivotal role in shaping modern India, driving economic growth, and opening new opportunities. However, it also presents significant challenges, including managing economic inequality, preserving cultural identity, and ensuring sustainable development. The overall impact of globalization on India is multifaceted, with both positive and negative dimensions that continue to evolve.