How Globalisation Impacts Indian Economy

GLOBALISATION AND
INDIAN ECONOMY.
Globe- Global- Globalisation
-Being Global.
Pankaj Saikia/MES-2014

• Out of the food items that have been
displayed in the feat which is not found in
India. Just Think……..
• Is the dress that we are wearing is our
tradition!
• Is the language that we are speaking is of
Indian origin?
• Think about some other areas like Education,
Employment, Production, Culture!
COUNTRIES ARE INTERCONNECTED

GLOBALISATION
It is the process of rapid
integration or
interconnection between
countries.

ECONOMIC GLOBALISATION
It is the process of rapid
integration or
interconnection of investment,
production, distribution,
employment and trade among
countries of the world.

Multinational
Company/Corporations-
The companies or corporations which
have their business in more than one
country are called Multinational
Corporation or MNC. for example- Pepsi,
Nike, Apple Microsoft, etc.
FEW IMPORTANT TERMS ;

Investment- The money that is used to
assemble the factors of production
such as land. building, machinery etc.
are called Investment.
Foreign Investment- Investment made in
a country by a Multinational Company
originated from some other country is
called Foreign Investment.

Foreign Trade-
The trade or buying and selling activities
among the different countries are called
foreign trade.
• Export- Selling of goods or service to any
foreign country.
• Import- Buying of goods or services from rest
of the world.

• Spreading production across
countries……..
• Interlinking production by setting up
production centers in different
countries!
• Joint production of MNCs with domestic
companies?
• Free trade among the countries!
WAYS OF INTER CONNECTIONS

SPREADING PRODUCTION OF NOKIA MOBILE.
Technology
development in USA
Headquarter and
control from Finland
Hardware in China
Software by Microsoft
in India and USA
Assembled in India
and China

•Quality and cheap Labour.
•Low cost of production.
•Wider market.
•Better quality of material.
•Final production near the
market.
•And many more…..
BENEFIT BY SPREADING
PRODUCTION ;

INTERLINKING PRODUCTION ACROSS
COUNTRIES
USA
Pakistan
India
Bangladesh
China

For MNCs-
•Standard of the products produced
strictly as per the demand of the
customer.
•As the goods are produced and sold in
one country the cost of production is
less and hence can sale at a lower price.
•Better consumer response as the goods
is produced in their locality.
BENEFIT OF INTERLINKING PRODUCTION
;

•For domestic countries-
•Increase employment opportunity for the
people of domestic country.
•It brings foreign capital and helps in
expansion of foreign exchange (foreign
currency) reserve.
•Helps in utilisation of unused resources.
•Customers get better quality products at a
comparatively lower price.
•Increase in countries revenue by way of tax.
BENEFIT OF INTERLINKING PRODUCTION
;

INTEGRATION OF MARKET
It refers to Export and
import of goods and
services among the
countries.

MARKET INTEGRATION
INDIA
Saudi Arabia
Britain
USA
Pakistan

•Better quality products.
•Optimum utilisation of
resources.
•Wider market for the producers.
•Wider choice and lower price.
•Access to product produced in
any place of the world.
• Harmony among the countries.
BENEFIT BY MARKET INTEGRATION ;

RESTRICTIONS IN TRADE AMONG
COUNTRIES
Traditionally the countries of the world
were very conservative and did not allow
the foreign trade freely. They imposed
many barriers to restrict trade. Such as-
High rate of tax-
Banning export or import of some
products-
Banning trade with some selected
countries-

• Different standard of economy.
•To protect local small and
tiny industries.
• Fear of economic colonialism
by the strong countries.
•Threat to society and culture.
CAUSES FOR IMPOSING TRADE BARRIERS.

WORLD TRADE ORGANISATION
Promoting free trade world wide..

WORLD TRADE ORGANISATION (WTO)
It is an international
organisation form by the
initiative of some developed
countries and now it has 160
member countries worldwide
till June 2014

OBJECTIVE OF WTO
To promote international
trade and assist the
producers, exporters and
importers of different
countries

WHAT WTO WANTS?
It wants, there should
no restriction for
anyone to buy or sale
anything produced by
anyone around the
globe.

Debate on Free Trade

•Developing countries most of
the times oppose the idea of free
world economy and refuses to
remove some barriers..
•It is because-------
DEVELOPING COUNTRIES AND WTO

•Industries in developing countries
are not equally developed to
compete with the large MNCs.
And-
•Industries of developing countries
who bears heavy tax burden will
not be able to compete with the
large producers of developed
countries supported by subsidies.
WHY DEVELOPING COUNTRIES OPPOSES-

FACTORS ENABLING GLOBALISATION

•Development in Technology.
•Liberlisation of Foreign
trade and Investment.
FACTORS ENABLED GLOBALISATION

•Communication and Information
technology.
•Production Technology.
•Transportation Technology.
•Packaging technology.
DEVELOPMENT IN TECHNOLOGY;

Liberlisation means removal
of barriers by the countries
on-
• Foreign Trade, and-
•Foreign investment by MNCs
and foreign investors
LIBERLISATION
;

EFFECT OF GLOBALISATION

• Better quality products for
consumers at lower price.
• Wider choice.
• World wide market for Indian
producers
• Helps in Capital Formation.
• Employment outside India.
• Access to better technology.
POSITIVE EFFECTS OF GLOBALISATION ;

• Brings threat to small local Producers.
• Outflow of Indian currency by way of
profit of MNCs.
• Makes the country dependent on others.
• Lack of public Interest.
• Exploitation on employees.
• Disrupt the social and cultural life of the
people.
NEGATIVE EFFECTS OF GLOBALISATION ;

The central and the state
governments in recent times
taking different steps to attract
foreign investment by MNCs
and foreign individuals in India.
Which includes -
• Declaration of SEZ.
• Liberlisation of Labour Laws.
GOVERNMENT MEASURES

These are some selected area
which are equipped with world
class facilities of electricity,
water, roads, storage,
recreational, educational, etc
where a world class industry can
set up. The companies who set
up industry in such areas get tax
relief for first few years.
SPECIAL ECONOMIC ZONE (SEZ)

The employers in India need obey
certain rules that aims to protect the
interest of workers. Recently
government allows the companies to
ignore many rules. Which is called
Liberlisation of labour laws.
LIBERLISATION OF LABOUR LAWS

Flexibility in labour laws enables the
MNCs to ignore some rules that helps
the companies in keeping the size of the
workforce under control. A company can
hire and fire as per the seasonal
variation in demand for the workforce
HOW LIBERLISATION OF LABOUR LAWS HELPS THE MNCS

??????????
Should we support or reject
globalisation………?

GLOBALISATION IS THE WAY---
Globalisation is a process or
change for mankind all over the
world, where the question for
accepting or rejecting is irrelevant
today.

• Screening on arrival of goods
or services.
• Government support to Local
Companies.
• Strict implementation of labour
laws .
•Negotiate with WTO for fairer
globalisation.
STRETEGY FOR FAIR GLOBALISATION;

How Globalisation Impacts Indian Economy

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Viewers also liked

Viewers also liked (20)

Similar to How Globalisation Impacts Indian Economy

Similar to How Globalisation Impacts Indian Economy (20)

More from Pankaj Saikia

More from Pankaj Saikia (20)

Recently uploaded

Recently uploaded (20)

How Globalisation Impacts Indian Economy