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Impact of Globalization On Indian Development
Globalization is the integration of communities, cultures, economies, markets, trade, and aids to trade through information technology, link of information, transportation, and commerce. This has made the world one big village. In addition, globalization has allowed the world free trade, free flow of capital, and better and cheaper labor outsourcing. Generally, globalization means linking distant social happenings and making the economy of one country part of another country.
Globalization has helped India as a country to merge with the rest of the world and has thereby brought immense benefits. However, the economy of India suffered a major setback in 1991 when the nation's foreign reserves dropped to one billion dollars. With the help of globalization, when the then Finance Minister - Manmohan Singh initiated the LPG (Liberalization, Privatization, and Globalization) policy, the economy experienced a U-turn in growth.
Currently, India's Gross Domestic Product is worth 3.1 trillion dollars, and for those who understand how to calculate today match rate, you will know what this means. This makes the nation the sixth-largest economy globally, with an 8 - 8.5 expected growth rate in 2022. This makes it the fastest-growing economy in the world.
The inflation rate has drastically reduced from 10 percent to 4.6 percent in the last five years. This development is coupled with growth in other economic indices like FDI, GST, and FPIs, 547.2, 18.42, and 6.68, respectively, all in billions of US dollars.
What Are Notable Impacts of Globalization on India?
Globalization has impacted all sectors (primary, secondary, and tertiary) and industries of India's economy, but the seven main impacts are discussed as follows:
1) Increased competition between local and foreign producers
India currently has a lot of options available to consumers, thanks to globalization. Unlike before, when fewer foreign companies and local companies had the monopoly, there is now more competition. Indian local manufacturers have to compete with foreign investors; hence they have to produce better goods not to lose relevance.
2) Direct foreign investment
Due to globalization, India has become an attractive market to foreign investors. This means a higher inflow of foreign capital for the country, a boost in the production and service sector, and massive growth in the import-export sector. International companies have also benefited from this growth because it has afforded them access to a larger consumer and cheap worker base. This, in return, will boost the economy, appreciate the currency, and improve par capital income.
3) Improved job opportunities
Millions of Indians are not poor due to the revival and enlargement of the Indian economy. This has been made possible due to the competitive export costs that created many jobs. As a result, there is an increase in people's purchasing power, giving vitality to business activities in the country. This has helped raise the standard of living of the people as they can afford necessities.
4) Lower risk profile
India has a wide coverage of international markets. As a result, investors in India run a lower risk if there is low demand in one country, as they can easily get access to another. In addition, research has shown that India can easily adapt to new demands in the international market. This makes it less probable for investors to lose if there is a turn in the market tide.
5) Local firms translating to multinational companies
Globalization has helped local industries translate into multinational companies that have branches beyond the shores of India. This has brought an influx of foreign currency and aid capital formation. As local industries are translating into multinational companies, they have a new set of responsibilities of investing in aid to trade.
In addition, it has also raised the reward system, as local firms are now using international wage rates for their employees. As a result, there is a better standard of living for Indians.
6) Indian performing arts
Bollywood is now known far and wide because of the impact of globalization. More Indian dance shows are now being held worldwide, thus spreading the Indian culture. In addition, the Indian movie and music industry has gained recognition worldwide because they can be projected to a global audience rather than the locale alone.
7) Access to better technology
Production has become better, easier, and faster because of better technology. Exposure to global technology allows Indian manufacturers to make more quality goods cheaper and faster. There has been tremendous improvement in the local content of products and the production process in India because of globalization.
In general, it has helped the local industries to compete favorably with their foreign counterparts. Expertise and technology have been borrowed and adopted, and this has placed Indian manufacturers on the front burner of the world map. As a result, it reduces imports, covering up the balance of the payment deficit, increasing exports, and growing the country's GDP.
Globalization has a lot of positive impacts on the Indian economy and culture. Indian sceneries have become a source of tourist attraction to foreigners. This has also helped generate revenue for the government, exposure for foreign and local investors, and created job opportunities for the citizens. As a fast-growing economy, it will be wise to invest in India. You will be sure of good returns, but you will also be sure of having access to a wide range of local and international consumer bases.
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