Himanshu

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Impact of

Globalisation on
the Indian
Economy
The process of globalisation has had a profound impact on the Indian
economy over the past few decades. As India has become increasingly
integrated with the global market, it has experienced significant shifts in trade,
investment, and the overall economic landscape. This presentation will
explore the key aspects of this transformation and examine how globalisation
has reshaped India's economic development.

VB
By Sparsh bhatnagar
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Overview of Globalisation
and its Key Drivers

1 Technological 2 Trade Liberalization


Advancements
Reduction in tariffs, elimination of
Rapid advancements in trade barriers, and the creation of free
communication, transportation, and trade agreements have facilitated the
information technology have enabled movement of products and services
the seamless flow of goods, services, globally.
and capital across borders.

3 Financial Integration 4 Outsourcing and


Offshoring
The integration of financial markets
and the ease of cross-border capital Businesses are able to leverage global
flows have increased investment supply chains and take advantage of
opportunities and access to global cost-effective labour and resources in
capital. different countries.

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India's Economic Reforms and
Integration with the Global Economy
Liberalization and Privatization and Participation in Global
Deregulation Foreign Investment Trade Agreements

India's economic reforms in the 1990s, Privatization of state-owned India's membership in organizations like
including the liberalization of trade and enterprises and the relaxation of the World Trade Organization (WTO)
investment policies, have opened up foreign direct investment (FDI) and its involvement in regional trade
the economy to global markets. regulations have attracted significant agreements have further integrated the
international capital and expertise. country with the global economy.

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Impact on Trade and
Investment Flows

1 Expanding Trade
India's exports and imports have grown significantly, with a more diverse
range of trading partners and a shifting composition of traded goods and
services.

2 Increased Foreign Direct Investment


India has become an attractive destination for foreign direct investment, with
inflows from multinational corporations across various sectors, including
manufacturing, technology, and infrastructure.

3 Emergence of Global Value Chains


Indian companies have integrated into global value chains, both as suppliers
and as participants in the production and distribution of goods and services
worldwide.

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Impact on Domestic
Industries and Sectors

Manufacturing Information Technology


The manufacturing sector has undergone The IT industry has flourished, with India
significant restructuring, with increased emerging as a global hub for software
competition, technological upgrades, and the development, business process outsourcing, and
integration of domestic firms into global supply high-tech innovation.
chains.

Retail and E-commerce Aviation


The retail landscape has undergone a The aviation industry has experienced significant
transformation, with the growth of organized expansion, with the growth of low-cost carriers,
retail, the rise of e-commerce platforms, and the the entry of foreign airlines, and the upgrading
increased presence of international brands. of airport infrastructure.

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Impact on Employment and Labour Markets

Job Creation Skill Upgradation Workforce Transition


Globalisation has led to the creation of new There is an increased demand for skilled Certain sectors have faced job losses or
job opportunities in export-oriented industries, labour, leading to a focus on education, displacement due to increased competition
the IT sector, and industries catering to training, and the development of specialised and automation, necessitating the retraining
international markets. skills to meet the requirements of the global and redeployment of workers.
economy.

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Impact on Economic Growth and
Poverty Alleviation
Economic Expansion Poverty Reduction Uneven Impacts

Globalisation has contributed to India's Increased economic opportunities, job The benefits of globalisation have not
sustained economic growth, with creation, and access to essential goods been equally distributed, leading to
increased productivity, innovation, and and services have helped in the concerns about income inequality and
access to international markets and reduction of poverty levels in India. the need for inclusive growth strategies.
resources.

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Challenges and Policy
Considerations for the
Future
Addressing Protectionist Fostering Inclusive
Tendencies Growth
Balancing the need for open markets and Ensuring that the benefits of globalisation
global integration with the protection of are more equitably distributed and that
domestic industries and jobs is a key vulnerable groups are not left behind is a
challenge for policymakers. priority for sustainable development.

Enhancing Navigating Global


Competitiveness Uncertainties
Continuing to invest in infrastructure, skills Adapting to changing global economic
development, and innovation to improve conditions, trade disputes, and emerging
the competitiveness of Indian firms in the challenges such as pandemics and climate
global marketplace. change requires agile policymaking.

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