What Is Globalisation & its impact on the Indian Economy?

What Is Globalisation?

Globalisation means integral the economy of one country with the global economy. During Globalisation the main focus is on foreign trades, private & institutional foreign investment. It is the last policy of LPG.

It mainly aims to transport the word towards independence and integration of the word as a whole by setting various strategies and policies. Globalisation is attempting to create a borderless world where the needs of one country can be driven from across the world and turned into one large economy.

Globalisation is an important element of an Indian economy introduced in India 1991, that should be social integration of the economy with the rest of the world. Accordingly would have access to the fruits of global growth.

Globalisation impacts an effective way of manufacturing and the world being able to produce raw materials and provide the resources at the chipset ways. In the entire world market.

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Impact/Effects Of Globalisation On Indian Economy

Globalisation has both positive & negative impact on Indian economy, there are as follows;

Positive Impact Of Globalisation

There are some positive impacts or effects of Globalisation policy on the Indian economy.

Increase in foreign trade:

As a result of foreign trade policy adopted in the Globalisation era, India’s share in world trade has gone up. Globalisation of India’s foreign trade has been increasing India’s share in the world.

In 1990-91 India’s share was 0.53% and in 2010-11 it increased to 1.78%. India’s share of GDP has been constantly rising, In 1990-91 it was 6% of GDP that grew to 22% in 2014-15.

India’s percentage Change of share in world trade

Year Data(%)

Increase in foreign investment:

As a consequence of Globalisation in foreign economy policy out Govt. encouraging the entry of foreign investment there was Foreign Direct Investment (FDI) as well as foreign portfolio investment.

YearFDIPortfolio Invest (US Million)

The above data reflect that there is a significant increase in Foreign Direct Investment in india.

Increase in foreign collaboration:

Globalisation has promoted collaboration of foreign companies with many Indian companies. This collaboration technique can be technical or financial or to be both.

Increase in Foreign Reserve:

As a result of Globalisation of India there is an increase in foreign exchange reserves. In the year 1991 foreign exchange reserves in India amounted to Rs 4,388 crore which in April, 2012 increased to Rs 15,24,328 CR. Thus there has been an increase of 347 times in foreign exchange reserves in india.

Expansion Of Market:

Globalisation has expanded the size of the market and it has permitted Indian business units to expand their business in the whole world. Now the Multinational companies have no national boundaries. Indian companies like infosys, Tata Consultancy, WIPRO, Tata Steel, Reliance etc are doing their business in many countries in the world.

Technological Development:

Globalisation has prompted the technical collaboration of foreign countries. Now Indian business units use modern technology that resulted in technology development in the Indian business model or unit.

Reduction Of Drain:

As a result of Globalisation many MNCs have set up their business units in India. These MNCs provide attractive salary packages and with efficient skills.

Development In Capital Market:

Globalisation has helped in development in the Indian capital market. Now Indians are investing in foreign capital markets. There has been a substantial increase in info foreign investment.

Increase in Employment:

As a result of Globalisation foreign countries are establishing their production and trading units in india. There has been an increase in employment in india.

Negative Impact Of Globalisation On Indian Economy

Loss of domestic Industries:

As a result of Globalisation foreign industries increase in India because the low quality india good many indian industries failed to compete and have been closed.

Unemployment Problem:

Due to Globalisation foreign companies or some Indian companies use some capital intensive technology with the increasing use of capital intensive technology employment reduced and the unemployment arises in the Indian economy.

Increase in inequality:

Due to Globalisation the MNCs and big industries are benefited but small and cottage industries are adversely affected. There has been an increase Inequality in india.

Exploration of Labour:

Globalisation is exploiting unskilled workers by giving lower wages, less job security, long working hours and worse working conditions.

Bad effect on Culture and Value system:

Many Global companies sell such a product which destroys our culture and value system.


On the basis of the above study we learn that Globalisation is an outward looking prelaunch. It is a mixed bag of success and failure. The positive and negative impact of Globalisation says that it is not equally beneficial to all countries of the world.

So, we need a policy of Globalisation which provides beneficial effects and raises the welfare of people all over the world. So the Govt. should adopt measures to ensure a fair Globalisation policy.


What Is Globalisation in Economics?

Globalisation refers to the increasing interconnectedness and interdependence of the country’s economy with the world economies. It facilitates development of technology and growth of international trade and investment.

Impact of Globalisation In Sociology?

Globalisation in sociology refers to the increasing interdependence and interconnectedness of societies and economies across the world. Sociologists have studied the impacts of Globalisation in society on different aspects of social life like culture, politics, economic and social Inequality.

Economic Globalisation Definition?

Economic Globalisation refers to the increasing interconnectedness of a country or nation’s economy with the world economy. It is also facilitated by advanced technology, transports and communication which help for easier and faster conduct business across the worldwide.

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