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country's markets to foreign investments in the early 1990s. Globalization of the Indian
Industry took place in its various sectors such as steel, pharmaceutical, petroleum,
chemical, textile, cement, retail, and BPO.
Globalization means the dismantling of trade barriers between nations and the integration
of the nations economies through financial flow, trade in goods and services, and
corporate investments between nations. Globalization has increased across the world in
recent years due to the fast progress that has been made in the field of technology
especially in communications and transport. The government of India made changes in its
economic policy in 1991 by which it allowed direct foreign investments in the country.
As a result of this, globalization of the Indian Industry took place on a major scale.
The various beneficial effects of globalization in Indian Industry are that it brought in
huge amounts of foreign investments into the industry especially in the BPO,
pharmaceutical, petroleum, and manufacturing industries. As huge amounts of foreign
direct investments were coming to the Indian Industry, they boosted the Indian economy
quite significantly. The benefits of the effects of globalization in the Indian Industry are
that many foreign companies set up industries in India, especially in the pharmaceutical,
BPO, petroleum, manufacturing, and chemical sectors and this helped to provide
employment to many people in the country. This helped reduce the level of
unemployment and poverty in the country. Also the benefit of the Effects of
Globalization on Indian Industry are that the foreign companies brought in highly
advanced technology with them and this helped to make the Indian Industry more
technologically advanced.
The various negative Effects of Globalization on Indian Industry are that it increased
competition in the Indian market between the foreign companies and domestic
companies. With the foreign goods being better than the Indian goods, the consumer
preferred to buy the foreign goods. This reduced the amount of profit of the Indian
Industry companies. This happened mainly in the pharmaceutical, manufacturing,
chemical, and steel industries. The negative Effects of Globalization on Indian Industry
are that with the coming of technology the number of labor required decreased and this
resulted in many people being removed from their jobs. This happened mainly in the
pharmaceutical, chemical, manufacturing, and cement industries.
The share of Indian manufacturing industry towards India GDP has grown from 25.38%
in 1991 to 27% in 2004. Further, the contribution of the Indian manufacturing sector to
the Indian export sector has increased from 52% in 1970 to 59% in 1980 and 71% in
1990 and 77% in 2000-01. Furthermore, the Indian manufacturing exports accounted for
a little over 5% (in 1990) of the value of output of the Indian manufacturing sector but
today it is close to 10%.
India exports manufactured products worth about US$ 50 billion and a recent study on
Indian manufacturing industry has forecast an annual growth of 17% by the end of the
year 2015. In other words at this rate of increase the quantum of India's manufacturing
exports will cross the US$ 300 billion mark by the end of the financial year 2015. Most
of this business would be in the domain of auto components, pharmaceutical, apparel,
specialty chemicals, and electrical and electronic equipment sectors. The Indian sectors
which grew tremendously as a result of globalization of the Indian manufacturing sector
are as follows -
• Capital goods
• Engineering goods
• Chemicals
• Petroleum
• Chemicals & fertilizers
• Packaging
• Consumer non-durables
• Electronics
• IT Hardware & peripherals
• Gems & jewelry
• Leather & leather products
• Mining
• Steel & non-ferrous metals
• Textiles & apparels
• Water equipment
The positive effect of the globalization of the Indian manufacturing sector can be
corroborated from the following facts -
India is slowly shedding its image from being an agriculture based country to a
manufacturing based country and thus the above-mentioned bottlenecks should be
immediately arrested and eradicated to ensure further growth of this industry. To ensure
elimination of the above-mentioned aberrations form the Indian manufacturing sector the
government of India must focus on areas like improving the urban infrastructure,
ensuring fair competition and access to markets, reduction of import duties, quality
improvements in vocational and higher education, increased investment in R&D and
support of SMEs.
The manufacturing industry is the backbone of any economy since it helps in the overall
growth of productivity, employment, and it also strengthens agriculture and service
sectors. The astronomical growth in worldwide distribution systems and Information
Technology, coupled with opening of trade barriers, has led to stupendous growth of
global manufacturing networks, designed to take advantage of low-waged yet efficient
Indian work force. The globalization of the Indian manufacturing sector has brought
down the percentage of Indians living below poverty line from 40% to 25%. The Indian
manufacturing sector is successfully competing in the global marketplace and registering
high growth on year-on-year basis since the 1990s.
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advantages:
disadvantages:
Increased flow of skilled and non-skilled jobs from developed to developing nations as
corporations seek out the cheapest labor