# Effect of globalisation on Indian economy

• Indiaâ€™s share in the world exports has risen to 1% in 2005 and further to 1.6% in 2012 in comparison to 0.53% in 1991 and 1.78% in 1950 (See chart 1)
• ÂƒOur foreign currency reserves which were 1 billion USD in June 1991 rose to 294 billion USD at the end of March 2012
• ÂƒSince 2002-03, exports have picked up and the average growth of export has been more than 24 % p.a. since 2002-03. During 10th FYP export has increased about 24% per annum
• ÂƒOur exports which financed only about 60% of our imports in the latter half of the eighties, now finance nearly 80% of imports. The current account deficit which was 3% of GDP in 1990-91 had fallen to less than 1% in 2000-01. However, during 2001-04, we had a surplus in our current account (0.7-2.3% of GDP). The current account deficit reached (-) 4.2 of GDP in 2011-12
• ÂƒThe exchange rate for the rupee has remained quite stable
• ÂƒOur FDIs which were just 155 million dollars in 1991, have risen to about 8.9 billion dollars in2005-06 and further to 22 $in 2008-09. This exhibits international confidence in India. However, it fell to 18 billion U.S. dollars in 2009-10 as a result of global financial disturbances but increased to US 22$ billion in 2011-12. (See chart 2)
• ÂƒAvailability of larger variety of consumer goods, improved quality of goods and reduced prices of consumer durables are some of the advantages that Indian consumers now enjoy
• ÂƒIndiaâ€™s rating has been upgraded by the rating agencies which rate investment risks in countries for global investors
• ÂƒIndian marketâ€™s responses are in line with the fluctuation in U.S. or U.K. markets and the stock market indices of countries across the globe show significant corresponding movements in Indian market
• ÂƒThere has been an increased focus on quality management and Human Resources and Development programmes
• ÂƒThere have been a large number of takeovers, foreign collaborations, technology transfer agreements between Indian and multinational companies
• ÂƒMany Indian companies like Asian Paints, Tatas, Infosys, etc. are now operating abroad
However, it is argued that the competition was not among equals, but between 2 sections which are poles apart in terms of their financial ability the financially strong corporations and the economically weak Indian corporate. Also, globalised economies perform well during a period of dynamism and high growth, whereas they are prone to collapse and downturn in international economic activity.