IMPACT OF GLOBALIZATION ON INDIAN INDUSTRY

Effects of globalization on Indian industry started when the government opened the country’s markets to foreign investments in the early 1990’s.

Globalization of the Indian industry took place in various sectors such as steel, pharmaceuticals, petroleum, chemicals, textile, cement, retail and BPO.

Globalization means the dismantling of trade barriers between nations and the integration of the nation’s economies through financial flow, trade in goods and services and corporate investments between nations.

Globalization has increased across the world in the recent years due to the fast (quick) progress that has been made in the field of technology especially transport and communication.

The process of globalization leads to opening up of markets to world trade, internationalization of financial markets, population migrations and increased mobility of persons, goods, capital, data and ideas.

The Government of India made changes in its economic policy in 1991 by which it allowed direct foreign investments in the country. As a result of this, globalization of the Indian industry took place on a major scale.

BENEFITS OF GLOBALIZATION ON INDIAN INDUSTRY

-        

          Globalization brought in huge amounts of foreign investments into the industry especially in BPO, pharmaceutical, petroleum and manufacturing industries.

-         The foreign direct investment coming into Indian industry, boosted Indian economy.

-          

       Multinational companies have increased their investment in India over the years

-          

      Larger companies have emerged as multinationals themselves

-        

        This provided Indians employment

-    

         It reduced the level of unemployment and poverty.

- 

          Foreign companies brought in highly advanced technology

-        

        This helped make Indian industry more technologically advanced

NEGATIVE EFFECTS OF GLOBALIZATION ON INDIAN INDUSTRY

-    

          High competition in Indian market between foreign companies and domestic companies.

-  

          Foreign goods better than Indian goods, consumers preferred buying foreign goods

-       

         This reduced the profit of Indian goods

-     

        This was seen mainly in pharmaceuticals, manufacturing, chemical and steel industries.

-

          Decline in agriculture

-          Disparity between rural and urban India

-          Growth of slum capitals

-          With the coming of technology the number of laborers required decreased. This resulted in many people being removed from their jobs.

The effects of Globalization on Indian industry have proved to be both positive and negative.

The government of India must try to make such economic policies with regard to Indian Industry’s Globalization that are beneficial and not harmful.