The Globalisation of Indian Economy

India is the seventh largest and the second most populous country in the world. A new spirit of economic freedom is now stirring in the country, bringing sweeping changes in its wake. A series of ambitious economic reforms aimed at deregulating the Indian economy and stimulating foreign investment have moved India firmly into the front ranks of the rapidly growing Asia-Pacific region and unleashed the latent strengths of a complex and rapidly changing nation. The opportunities generated consequently are immense and the leading MNCs have been typically quick on the uptake. GE Capital terms the Indian economy unique, PepsiCo finds it one of the fastest growing and Motorola is sure it will turn into a major sourcing centre. Indian operations have occupied centre stage in these giants' global networks. India's process of economic reform is firmly rooted in a political consensus that spans her diverse political parties. The country's democracy is a known and stable factor, which has taken deep roots over nearly half a century. Importantly, India has no fundamental •conflict between its political and economic systems. Its political institutions have fostered an open society with strong collective and individual rights and an environment supportive of free economic enterprise.



India's time-tested institutions offer foreign investors a transparent environment that guarantees the security of their long-term investments. These include a free and vibrant press, a judiciary that can and does overrule the government, a sophisticated legal and accounting system, and a user-friendly intellectual infrastructure. Post 1991, India's dynamic and highly competitive private sector has been the backbone of its economic activity. It accounts for over 75 percent of its Gross Domestic Product and offers considerable scope for joint ventures and collaborations. Today, India is one of the most exciting emerging markets in the world. Skilled managerial and technical manpower that match the best in the world and a vibrant middle class whose size exceeds the population of the USA or the European Union, provide India with a distinct cutting edge in global competition.

Indian economy had experienced major policy changes in the early 1990s. The new economic reform, popularly known as Liberalisation, Privatisation and Globalisation (LPG model) aimed at making the Indian economy globally competitive and ensuring faster growth. The series of reforms undertaken with respect to industrial sector, trade as well as fmancial sector have been aimed at making the economyy more efficient. With the onset of reforms to liberalise the Indian economy in July 1991, a new chapter has dawned for India and her billion plus population. This period of economic transition has had a tremendous impact on the overall economic development of almost all major sectors of the economy, and its effects over the last decade can hardly be overlooked. Besides, it also marks the real integration of the Indian economy with the global economy. ThiS" era of reforms has also ushered in a remarkable change in the Indian mindset, as it deviates from the traditional values upheld since Independence in 1947, such as self-reliance and socialistic policies of economic development, which mainly due to the inward looking restrictive form of governance, resulted in the isolation, overall backwardness and inefficiency of the economy. This situation had been prevailing despite the fact that India has always had the potential to be on the fast track to prosperity.

Now that India is in the process of restructuring her economy, with aspirations of elevating herself from her present precarious position in the world, the need to speed up her economic development has become even more pronounced. And having witnessed the positive role that Foreign Direct Investment (FDI) has played in -the rapid economic growth of most of the South East Asian countries and most notably China, India has embarked on an ambitious plan to emulate the success of her neighbours to the east and is trying to sell herself as a safe and profitable FDI destination. Globalisation has many meanings depending on the context and on the person who is talking about it. Though the precise definition of globalisation is still unavailable, a few definitions are worth viewing. Guy Brainbant says that the process of globalisation not only includes opening up of world trade, development of advanced means of communication, internationalisation of financial markets, growing importance of MNCs, population migrations and more generally increased mobility of persons, goods, capital, data and ideas but also infections, diseases and pollution. The term globalisation refers to the integration of economies of the world through uninhibited trade and financial flows, as also through mutual exchange of technology and knowledge. Ideally, it also includes free inter-country movement of labour. In the Indian context, this implies opening up the economy to foreign direct investment by providing facilities to foreign companies to invest in different fields of economic activity in India, removing constraints and obstacles to the entry of MNCs in India, allowing Indian companies to enter into foreign collaborations and also encouraging them to set up joint ventures abroad; carrying out massive import liberalisation programmes by switching over from quantitative restrictions to reduction of tariffs and import duties, etc. Therefore globalisation has been identified with the policy reforms of 1991 in India.

In the year 1492, Columbus had set sail to discover an India rich in spices and treasure. In the 21st century the world has set sail .for India for finding that treasure, as the trend shows. A large number of global multinational brands such as Coca-Cola, Google, Micro-soft and Mercedes-Benz have been successfully operating in India. Indian brands which were operating locally in India earlier have started competing internationally. From New Delhi to New York brands have become global. The pattern of consumption in India has also changed. Level of spending on private consumption has been rising significantly. Young consumers in India are regarded as the most powerful consumers. In an era of globalised environment, the country has become a major player in the socio-economic field from being merely a third world country not very long ago. Many studies and reports have forecasted India to be the third largest economy in the world by 2040. Globalisation in India has transformed the country's system. Presently India is regarded as an economy-dominated country rather than a politics-driven one, as it was earlier. Political dominance has declined significantly these days. Adoption of Globalisation in India and liberalisation principles have widened the horizon of the country's consumers worldwide. Consumers in India have become more conscious. Market information in India has become clear. Liberalised policies have led the industrial sector to grow at a faster pace. BPO, IT, ITES, Retail and Insurance sectors have performed well. Both male and female have got equal opportunity in that sector. A substantial success in this regard is the reduction in gender inequality in India. Moreover, progress in education and awareness, a gift of globalisation, has elevated the country to a higher pedestal in the community of nations.