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Effects Of Globalization On Indian Economy


The amazing effects have been analysed in the process of globalization started in 1991.

The main achievements of globalization are as follows:

  1. The foreign currency reserve increased to around 279 billion dollars in March, 2010 which was fallen to one billion in June, 1991.
  2. After globalization, the traders can finance 90 per cent of imports.
  3. The deficit of current account has been controlled to some extent. It was nearly 3 percent of GDP in 1990-91 which was reduced to 1.4 per cent in1998-99, then to 1% in 2000 – 01. During 2001–03, we had surplus in current account of around 1.8% of GDP. In 2009-10, current account deficit was -2.8 % of GDP
  4. From 1996–2003, External debt crisis arrested; it grew only by less than $ 3 billion/ year.
  5. Many new consumer items were imported in the process of globalization. These items were better in quality and available at reduced rates.
  6. Indian investors have begun to form positive outlook regarding the investment in foreign countries.
  7. The exchange rate of rupee has been maintained to some extend by RBI even after full convertibility of rupee in world market.
  8. Devaluation of rupee has helped to reduce the disequilibrium of BOP.
  9. Multi-national companies have established in India and pose threat to Indian companies. Indian companies have also been improving the quality of their product in order to face the competition.
  10. The spirit of international competitiveness has risen in the minds of Indian entrepreneurs who wish to participate in the international trade.
  11. International confidence in India has been restored. FDI were just 155 million dollars in 1991. They increased to around 3200 million dollar in 2004 – 05.

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