Impact of Globalisation on Indian Economy
- Globalisation has brought about greater competition amongst the local and foreign producers from different countries which has been advantageous for the consumers. Amongst the urban Indians, a greater choice of good quality cheap products has introduced a better standard of living.
- For the producers, though, the impact of globalisation is mixed. The MNCs have gradually increased their investments in India in the last 15 years. Industries such as electronic goods, especially cell phones, automobiles, soft drinks and fast food, services such as banking and investments have seen gradual upward trends of foreign investments. New employment opportunities have been created amongst the educated Indians. Moreover, the local suppliers to these industries have also prospered.
To attract foreign investments, the Central and State Governments in India have identified and developed Special Economic Zones (SEZs) with well-organised infrastructure. Companies who set up their production units here are given a tax exemption for five years. The government has also allowed flexibility in labour laws to encourage foreign companies in India.
- Moreover, newer technology and better standards of production have benefitted many top Indian companies. Some of the Indian companies have become MNCs and world players themselves. Infosys, Tata Motors, Asian Paints are a few examples, who have branched out in foreign countries from India.
- New opportunities in service industry, particularly in the Information Technology sector, have seen gigantic developments in India. The call centres, dotting almost all tier 1 and tier 2 cities of India, serving foreign companies, have become a common feature.
- However, the gloomy aspects of globalisation cannot be ignored. Many of the manufacturing units in the small-scale sector have been forced to close down due to the stiff competition from the MNCs. This has rendered a large number of people unemployed, especially in plastics, toys, electrical and electronic equipment manufactures who operated in small industries.
- Security of jobs has become a casualty on the face of stiff competition in the production sector. Indian workers in the garment industry produce largely for European countries and the USA. These foreign companies prefer the least cost of production. Hence the Indian manufacturers employ workers on a temporary basis without any service benefits, working for longer hours at a meagre payment, with no consideration of leave or healthcare. Although the workers are poorly paid, the exporter earns handsomely by selling in the foreign markets.