INDIAN ECONOMY
MODULE -A
UNIT-6: GLOBALISATION-IMPACT ON
INDIA (Short Note)
Agenda:
What is Globalization?
All about Globalization and Its impact on India?
What is Globalization in Reverse Gear?
JAIIB WITH ASHOK
GLOBALISATION – CONCEPT:
Globalisation is defined as a rise in economic integration
among nations as a result of cross-border trade in goods
and services, technology, and flows of investment,
people, and knowledge.
The term ‘Globalization’ was coined by Theodore Levitt.
The World War I, Great Depression and World War II
forced a retreat from globalisation.
In the mid-1980 the Organisation for Economic
Cooperation and Development (OECD) popularised the
term ‘Globalisation’ yet again.
Globalisation is described by the World Trade
Organization as the development towards unrestricted
cross-border flows of goods and services, capital, and
labour force.
The concept was formally introduced in India with the
'new economic policy' in 1991-92.
GLOBALISATION AND ITS ADVOCACY:
There is strong evidence from nations of all sizes and
locations that when countries globalise, their citizens
benefit from more exposure to a broader range of goods
and services, reduced costs, more and better-paying
employment, improved health, and higher overall living
standards.
JAIIB WITH ASHOK
Proponents of globalisation believe that it helps
developing countries to catch up to developed ones,
through increased manufacturing, diversification,
economic development, and higher living standards.
Cross-border investment and technology transfer bring
jobs.
GLOBALISATION AND ITS IMPACT ON INDIA:
The advent of globalisation caused significant changes in
the Indian economy's economic policy, production, and
consumer behaviour.
Globalisation has an influence on its culture as well.
The entry and expansion of foreign investment in various
areas propelled the Indian economy's development.
Exports were regarded as a growth engine, and many
new technologies were implemented, which boosted
productivity, in the long term.
Effects of globalisation include increased per capita
income, better employment opportunities, and far more
options for customers.
Globalisation added new options for agriculture exports.
JAIIB WITH ASHOK
FAIR GLOBALISATION & THE NEED FOR POLICY
FRAMEWORK:
The importance of mutual understanding and dialogue
among governments, organisations within and across
borders to promote social cohesion is a key proposition of
Fair Globalisation.
Fair globalisation creates opportunities for all, while also
ensuring that the advantages of globalisation are shared
equally.
Government measures must safeguard the interests of all
citizens, including workers.
Globalisation must be fair, inclusive, democratically
governed, and provide opportunities and tangible benefits
to all countries and people.
GLOBALISATION IN REVERSE GEAR-THE
THREATENED RE-EMERGENCE OF
PROTECTIONISM:
During economic and geopolitical crises, globalisation has
always taken a hit as WTO regulations allow governments
to practise trade protection measures to preserve national
interests within specific limits.
The process of reducing dependency and integration
amongst particular units throughout the world is known as
“Deglobalisation”.
JAIIB WITH ASHOK
When a government enacts laws that restrict or prohibit
international trade, it is participating in protectionism, and
protectionist measures frequently attempt to protect home
producers and workers from foreign competition.
Protectionism takes three main forms:
(a) Tariffs: Tariffs (taxes or duties on imports) increase the
price of imported goods in the domestic market, which,
consequently, reduces the demand for them.
(b) Import quotas: Quotas are restrictions on the volume
of imports. A constraint on the supply causes an increase
in the prices of imported goods, reducing the demand in
the domestic market.
(c) Non-tariff barriers: A nontariff barrier is a way to restrict
trade using trade barriers in a form other than a tariff.
Quotas are “non-tariff trade barrier.”
Currently a gradual shift in viewpoint towards embracing
of deglobalisation is taking place, primarily supported by a
number of unprecedented events, such as Brexit (British
+ Exit: Exit of UK from European Union), withdrawal of the
US from the Trans-Pacific Partnership, the US-China
Trade Disputes, COVID-19 Pandemic and the Russia-
Ukraine conflict.
Michael O'Sullivan has rightly said in his book, "The
Levelling: What's Next after Globalisation", Globalisation
is already behind us.
JAIIB WITH ASHOK