Globalisation benefits people worldwide, no matter where they live. It connects individuals in new ways and opens paths for businesses to expand beyond local markets. India serves as a prime example of how globalisation has transformed economies and opportunities across the globe.
With one of the largest populations in the world, India has become a key player in the global economy, especially in the technology sector. India is the sixth-largest economy in the world. In 2021, it had a nominal GDP of $3.17 trillion and grew by 8.9%.
India has a fast-growing economy, but its GDP per person is the lowest among the top 10 economies in the world, at $2,277. This is mainly because of its large population of 1.41 billion people. The country’s expanding workforce and increasing integration into international markets highlight the impact of globalisation in India.
So, what makes India and globalisation a special union? How did India become one of the world’s biggest economies? Globalisation has profoundly influenced India by shaping trade policies, creating jobs, and driving technological advancements.
What is globalisation?
Before examining India’s relationship with globalisation, it’s important to define the term. Globalization signifies the interconnectedness of the world’s economies, cultures, and populations, propelled by international trade, investment flows, and advancements in information and technology.
In simple terms, globalisation means companies or organisations operating on a global scale or increasing their influence across multiple countries.
Thanks to globalisation, people worldwide can enjoy goods and services developed in other nations. India’s widespread use of global technologies showcases the country’s growing role in this global process.
Factors that affect globalisation in India
Globalisation has significantly shaped the Indian economy. To encourage multinational companies to invest in developing countries, wealthier nations have pushed for trade liberalisation. They have advocated for fewer business restrictions to boost economic opportunities.
The International Monetary Fund (IMF) and the World Bank have played key roles in this effort. By lowering excise taxes on electronic items over time, economic reforms took root in India’s less developed regions.
Free trade has attracted foreign investors by removing export subsidies and import barriers. These reforms have dramatically transformed India’s industrial, financial, and agricultural sectors. Here are four major factors that have accelerated economic development and globalisation in India:
Technology
Modern technology has revolutionised communication. Social media has eliminated geographical barriers, enabling real-time interactions between businesses worldwide.
Since India took time to adopt new technologies, many high-paying jobs disappeared. Lower-paying jobs, requiring fewer technical skills but greater responsibility, replaced them. These jobs demand strong analytical, communication, and interaction abilities, leading to more employment opportunities.
Capital mobility
Over the past few decades, governments have systematically lowered barriers to capital movement between economies. Businesses now find it easier to send and receive funds, integrating financial markets globally, including India’s economy.
Thanks to easier capital flow, India benefits from globalisation by engaging in international trade and investment. Businesses can now conduct large-scale transactions more efficiently. Companies can also hire skilled professionals remotely and manage global payrolls with fewer complications.
Multinational corporations
Multinational corporations (MNCs) have helped economies like India thrive on a global scale. With streamlined shipping and logistics, India has become a hub for affordable manufacturing. MNCs have introduced successful business strategies worldwide.
As globalisation connects people from different cultures, they share ideas, traditions, and cuisines. In recent decades, MNCs have prioritised India, investing heavily in research and development centres across the country.
World Trade Organization
After the World Trade Organization (WTO) formed in 1994, nations lowered tariff and non-tariff barriers. The WTO is the only international group that manages global trade. Its goal is to help countries trade easily and without restrictions.
Since the WTO’s establishment, more countries have signed free trade agreements. These agreements have allowed businesses and individuals to enjoy the many benefits of globalisation. MNCs and governments now have greater investment opportunities in emerging markets, expanding the global trade landscape.
The impact of globalisation in India
Urbanisation and globalisation have profoundly shaped Indian society. Policymakers have played a critical role in shaping the country’s economic structure. Economic policies have influenced savings, employment, income, and investment levels.
One of globalisation’s biggest cultural impacts in India is the spread of international pop culture. It has reshaped the country’s economy, society, government, and traditions. Economic unity remains the most crucial factor in transforming India into a global economy. Here are some key benefits of globalisation in India today:
More consumer choice
Globalisation has given Indian consumers access to a broader selection of products. Shoppers can now choose from both local and international brands. Better and cheaper transportation helps Indians buy the latest consumer electronics and other goods more easily.
Increase in employment
MNCs expanding into India have created a surge in job opportunities. The country’s cost advantage in production has boosted exports and job creation. Loosened financial restrictions have further helped the job market grow. Additionally, the rise of modern technology and remote work has increased employment prospects in India.
Higher disposable income
International firms bring expertise and experience, leading to higher salaries in India. Changes in management structures have opened new opportunities and increased wages across industries.
Advantages of globalisation in India
Opening India’s markets to global trade presented foreign corporations with an unprecedented opportunity for expansion. With over a billion people, India became a massive market for global trade. The country continues to enjoy several advantages from globalisation:
1. Access to global markets
As global businesses entered India, Indian companies also gained access to international markets. Foreign investment surged, boosting the country’s import-export trade. Companies now benefit from economies of scale and specialisation, reducing production costs and increasing profitability.
2. Improved education
Globalisation, alongside improved internet access, has made quality education more accessible in India. Up-to-date information across industries has increased higher education demand, literacy rates, and skilled workers in the country.
3. Greater employment opportunities
Economic expansion and international investments have created new job opportunities in India, especially in the service sector. However, these opportunities often require higher education, leaving unskilled workers at a disadvantage.
4. Lower Business Risks
Expanding into the Indian market helps businesses lower risks, especially in manufacturing. Establishing multiple production hubs worldwide reduces supply chain disruptions. Additionally, India’s diverse export market attracts investors, making its economy adaptable to changing global demands.
5. Higher standard of living
Perhaps the most significant advantage of globalisation in India is the positive impact on the standard of living. The growing economy, access to modern technology, better education, and increased wages have enhanced the lives of many Indians.
Final thoughts on Globalisation in India
India’s integration into the global economy has sparked significant positive changes both domestically and internationally. The country experienced remarkable growth after its economic liberalisation in the 1990s. However, challenges such as complex regulations, corruption, and persistent poverty remain obstacles.
With its vast consumer market and skilled workforce, India offers international businesses a strong competitive edge. If India isn’t part of your global strategy yet, now is the time to explore its potential.
