Globalisation made the Indian economy one of the world’s quickest developing economies. It assisted in bringing in various changes concerning industrial, trade and cultural exchange to make the economy more competitive. It also heralded the integration of the Indian economy into the global economy.

Globalisation is the process of rapid integration or interconnection between countries –

• Trade and cultural exchange act as a virtual channel of connecting distant countries 
• Large companies, now called Multinational Corporations (MNCs), played a significant role in trade 
• Happens through the movement of people between countries. People migrate from place to place, searching for better education or for jobs which provide better income
• Today, more and more goods and services, investments, and technology are moving between countries

Enabling factors of globalisation

• Technology: Rapid technological improvements and transportation innovations have resulted in quicker conveyance across significant distances at lower costs.
  • Information and communication technology have made data’s global transmission possible at negligible costs. 
• Liberalisation of foreign trade and cultural exchange policy: Liberalisation is removing barriers or restrictions set by the government.
  • With the liberalisation of trade, businesses can make decisions freely about imports, exports, and investments. 
  • Starting around 1991 in India, the government decided to lift many trade and cultural exchange barriers to a large extent. 

Today, goods and services are produced globally. As a result, production is organised in increasingly complex ways, spanning national boundaries.

Impact of globalisation on the world

• Interlinking production across countries:

  • Corporations look for the availability of factors of production and favourable government policy while scouting to set up production in a country. 
  • The money spent by corporations to acquire assets is termed foreign investment by the host country. 
  • These MNCs use various routes like setting up new companies, joint ventures with local companies, buying a local company (most common), or placing orders to the local companies to manufacture under MNC’s brand name to set up in the host country. 
  • These corporations also bring enormous wealth and technical know-how with them. This way, geographically dispersed production is getting interlinked.

• Foreign trade and integration of markets:

  • Foreign trade allows producers to sell their goods outside their domestic nations. It enables consumers to buy goods apart from those made in their country. 
  • Foreign trade thus results in connecting the markets or integration of needs in different countries.

Effects of globalisation on India

Positive impact: 

• Massively increased trade by MNCs in India has led to increased profitability and growth of local supplier companies
• It has increasingly interconnected the Indian economy and companies by inducing higher quality of goods 
• It has created new opportunities for domestic service sector companies in more unique servicing fields like accounting, data entry, engineering, etc 
• Our own Indian companies have themselves prospered into MNCs. For example, TATA, Infosys, Asian Paints, etc

Negative impact: 

• Small manufacturers and industries such as domestic industries of toys, tyres, vegetable oils, etc., cannot compete with large MNCs, which has led to them shutting down. 
• Flexible employment culture: Due to increasing job competition, flexible employment culture has led to unsecured careers.

World Trade Organisation (WTO):

• It is an international organisation which aims to liberalise international trade.
• Started as the initiative of the developed countries, it establishes rules regarding international trade for all signed countries. 
• Though it is supposed to liberalise international trade, many developed countries have unjustifiably held exchange hindrances. Then again, the WTO has constrained emerging nations to eliminate all exchange hindrances.
• For example, farmers in the USA are receiving massive sums of money from the US government to produce and export agricultural produce to other countries. They can sell their produce at abnormally low prices in other countries, adversely impacting the farmers in these destination countries.

In a nutshell, the positive effects of the globalisation process have immensely benefited various industries and people. As mentioned above, the need of the hour is for fair globalisation to share benefits among all countries by creating additional opportunities equitably. 

Conclusion

India’s economy has grown at one of the fastest rates globally due to globalisation. It also signalled the rapid integration of the Indian economy into the global economy. It is a result of technological advancements, transportation improvements, and liberalisation. By drawing foreign direct investment and integrating markets through foreign commerce, globalisation has resulted in an increasingly interconnected world. This has resulted in a rise in diverse businesses. However, not everyone has reaped the benefits of globalisation. The World Trade Organisation (WTO) was founded to help promote fair globalisation.