Knowing the exact definition of globalization can be very difficult, it varies depending upon the circumstance and on the individual who is referring it. However, there are quite a few definitions that are worth considering. Guy Brainbant, for instance has stated that globalization is not merely an initiation of world trade, evolution of innovative ways of communication, migrations in ideas, population, capital, and goods but also more pollution, diseases and infections.

The very reference to the term globalization means uniting the economies across the globe by encouraging unrepressed financial and trade flow including bilateral transfer of knowledge and technology. When it comes to India, globalization implies providing simplified facilities to foreign businesses to invest in various sections of economic activities by inviting direct investors from other countries.

Influence of Globalization on India

There are innumerable effects of globalization on the Indian economy.

It has aggravated the competition among the economies of the global market and interdependence on each other. It is due to globalization in India, there is an increase in overall economic growth rate. In the 1970’s, the GDP of India was merely 3%, almost half when compared to GDP growth rate of countries like Korea, Indonesia, Brazil and Mexico.

In the 1980’s, the GDP growth rate of India doubled to 5.9%, but it was still on the lower than the rates of China, Indonesia and Korea. However, after major globalization reforms that took place in the year 1991, India successfully managed to improve its global position.

Composition of the Indian Economy

Globalization has not only increased the GDP growth rate of India, but has also hyped various sectors. Although primary manufacturing sectors have contributed to the major part in GDP growth earlier, the service industry has been equally responsible for the GDP growth in the later stages.

At Present the service sector has been contributing more than 57% of India’s GDP. This has upped the India’s stand at 18th place among the other top service markets in the world with 1.3 % share in global exports. BPO and software sectors have registered an exponential increase in growth for the past few years.

Let’s have look at other developing countries in comparison to India.

With Global trade into consideration, from past 20 years India has an increase in international trade exports from 0.05% to 0.07%. In the same time, China has increased its share three times to almost 4%.Philippine which has an economy six times smaller than India has trade share at par with India’s Global trade share.As far as FDI inflows are concerned, India has an average of 0.5% of GDP, whereas China had an average of 5% and Brazil is leading with 5.5%. 

Conclusion

In order to take see India grow on a large scale at a high speed, a proper analysis from the recent development will help in changing the current policies and avoid any pitfalls. 

United States is the world’s largest economy for more than a century now. However, with major developments that has occurred in the recent past in world economy has shifted the focus from United States and other rich European countries and the other two great Asian Countries – China and India. Various studies conducted by economic experts from across the globe have envisaged India and China to become the top economies of the twenty first century. 

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