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GLOBALIZATION IN INDIA
Globalization is something that we all have to deal with and should encourage if we wish to continue world economic development. By integrating culture, economies, politics, societies, and technology we can see globalization in action. There are some who argue that the negative aspects of globalization are something to be scared about, such as corporate world domination to be extreme, but overall growing economies understand that there are only a few negatives and that they can be managed in a way that make them acceptable . The majority of countries, especially India, notice the great benefits globalization has to offer and are eagerly trying to further negotiations to break down barriers and unite worldwide.
Globalization refers to the process through which societies and economies are integrated through cross border flows of ideas, communication, technology, capital, people, finance, goods, services and information. Cross country Integration has several aspects and can be political, cultural, social and/or economic, all which equal globalization. However, economic integration is the most common of the four aspects. Economic integration involves forming a nation's economy into an international economy. Unlike many of today's barriers, in the past there were no visa requirements, passports and tariff barriers or restrictions. After World War I and II the early trends of globalization decreased throughout the world as many barriers were set up which restricted the movement of goods and services.
As the skeptics may say, everything has two sides to the story. Globalization gains can be analyzed in three channels. The first way is in the trade of services and goods. Secondly by movement of capital, this allows total world savings to be distributed among nations with high investment potential. Through foreign capital inflow many economies have grown as it creates employment and exposes the country to production expansion capacity. The final concept is the financial flows. It is a fact that when one country faces a crisis it affects other countries as well, this is somewhat instinct. Through capital flow and foreign exchange, market resources are transferred increasing the turnover in the markets which is necessary to the international capital flow. Although this is great for a country it can have some drawbacks. In India for example, “recent studies have pointed out the negative effects like cultural erosion, materialism, increase in crime, social conflicts, overcrowding, and environmental deterioration”, (The Festival of Hola Mahalla,04).
India is a developing economy which has teeter totted from being one of the poorest in the world at one time to once again one of the world's top economies in recent years. The Indian economy is growing in steady manner which has promoted economic development. The population in India accounts for 17.5% of the total world's population. However India has a population growth rate of only 1.41% and is ranked 93rd in the world. India is consequently a capital-scarce economy that needs long-range sustainability of their resources such as water, minerals and land. The efficient utilization of India's capacity calls for a skilled work force which will increase the competitive advantage of India over other countries. The Indian government has modeled policies in focus of the promotion of economic growth and tapping into the benefits of foreign investment and world market. The government has gone to the extent of introducing tax exemptions for core units and infrastructure. By making improvements in the infrastructure it will benefit many businesses and consumers, as well as create many jobs improving the unemployment rate.
India has much strength which gives the country competitive advantage over other developing countries. An abundance of skilled labor and a thriving IT industry has continued to attract more foreign investment. As a result, India is more stable and has grown tremendously. With the enactment of Acts such as the Protection of Plant Varieties and Farmers' Rights Act and utilization of patent rights which Indian firms have been encouraged to file. India is reaping many benefits from maximizing these benefits in terms of international trade and investment. With India's dominance in Information Technology, it has been able to reach a wider market providing services on a global level. This has called for the need to achieve efficiency and productivity to meet the required standards. The affects of globalization in India has resulted in Indians migrating worldwide with infrastructure growth, trade, outsourcing, and off shoring amongst other things.
The most significant force of globalization in India is the intensification of business process outsourcing (BPO) services as well as information technology outsourcing. Many skilled professional Indians are employed in companies based in India, Europe, Africa, United States and other parts of the world. India provides a low cost, English speaking and educated workforce. Information Technology utilizes global communication strategies such as VOIP, internet and email through which enterprises around the world are able to save on costs when they outsource IT skilled Indians. Many software companies are known to do well in India as well as companies like Coca-cola, Pepsi, Kentucky Fried Chicken, and McDonald's. The products of these companies have been accepted at large. As a result of this outsourcing and BPO a novel middle consumer class has been established which services massive opportunity growth.
India is an attractive market; it has attracted many international players in various markets and thus tremendously improved international trade. International companies have focused on India because its population increases the base of their operations and expands their workforce with small investments. Such companies that have dared to enter into the Indian market have made remarkable profits. It is also important to take note of the Indian companies which have expanded internationally to reach a larger market. India has now become a key player in trade of steel, cars, IT and other products and secured a position as one of tomorrow's global economical leaders.
Infrastructure in India has rapidly grown. Many of the BPO companies based in Tier I cities (Mumbai, Kolkata, Indore, Bangalore) have thus been made to move into the Tier II cities (Mysore, Panchkula, Hosur, Madurai, Jaipur, Lucknow amongst others). This shift is as a result of the high cost of infrastructure in Tier I cities. The alternative Tier II cities have lower costs of overhead though the infrastructure in those cities is still under development. This has limited the companies to offering quality services as those in Tier I cities. The Indian government has through policy and partnership with other privately based firms commenced on developing world class infrastructure which will see more gains spread throughout the country (Indian Infrastructure, n.d)
The environment always comes up as an issue of discussion every time industrialization is mentioned. With the development of many local and foreign industries the environment standards are normally compromised as there is a lot of waste dumping and pollution that is associated with the same. The government of India has put stringent measures on companies that indulge in such unacceptable activity. Bills have been passed that will see sustainable development of Indian's resources. Putting in mind that India is a capital-scarce economy, these measures come at a time when they are needed. Some companies have been forced to adjacent their systems of operations which have cost them great deals of money, but will be beneficial in the long-term.
India has seen a lot of off shoring mainly from the developed countries. The main areas that are sent offshore to India are mostly IT related such as programming, software maintenance and testing, IT research and development, physical product manufacturing, IT enabled services, call centre and telemarketing. India has also utilized off shoring by sending work off shore and contracting foreign companies to work on their behalf. Although off shoring is cost effective it has resulted in a loss of many jobs and employees being laid off.
Through globalization India has reaped many benefits. Their business education has become more global as the model curricula are set by experienced business professionals. The Indians have managed to meet the requirements set by many international companies as well making their work force the most sort-after. The Indian economy has grown in a massive way being ranked as one of the top largest economies in the world. Also, the culture has begun to adapt to the changes from the many jobs that have been created. In a society where there are strict moral practices this has come as a great change as many women are forced to be at their places of work whereas they are supposed to be at home; women have landed many of the employment seats created. The overall affects of globalization and the shift in international management practices of Indian executives has changed the country's future forever. After finally accepting the practice of a defined globalization plan, India has re-emerged as a world economic power. From their early history of gaining economic power through trade and dominating the region with a quarter of the world's wealth, globalization in India has once again changed their status in the international community. From riches to rags and back to riches, India is setting an example that others wish to emulate.