Globalization in India Globalization, Generally

Globalization in India

Globalization, generally speaking, is a process whereby economies and societies become increasingly integrated with one another. The free-flow of information, ideas, technologies, goods, services, capital, finance and people joins different cultures together, which then creates an entirely new sort of culture. Economically speaking, the main parts of globalization or integration are trade, movement of capital and finance, as well as people.

Globalization in India has made it easier for foreign companies to expand their base of operation, as well as their workforce, while spending minimal amounts of money. For India, this process has meant the growth of outsourced IT and business process outsourcing services, such as call centers. Quite often now, for example, whenever an American calls a company for service regarding a product of some sort, they are connected to somebody working out of India. An increase in the number of skilled professionals in the country over the last few years, by both local and foreign businesses, as well as a low cost, but English-speaking workforce, has not only helped corporations lower their operating costs, but also given rise to a new Indian middle class, which has developed around the wealth that the IT and BPO industries have produced. This new middle class, furthermore, represents a new consumer base. Some of the most successful multi-national companies in India include Pepsi, Coca-Cola, McDonald's, and Kentucky Fried Chicken. (1)

Indian companies, also, are increasingly becoming major players in the globalization process through international expansions. Among the products Indian companies are offering the world, from steel to film industry, cars to IT, a massive potential for growth exists.

Since 2007, India and the European Union have been negotiating a free trade agreement. Such an agreement would be far-reaching, considering that nine EU-banks controlled 65% of total assets of foreign banks operating in India in 2008. Of the top 10 foreign banks working in India, six of them are European. India offers European banks great opportunities to expand profit share. They are focused on three niche markets, including up-market consumer finance, wealth management services and investment banking. One key question regarding any agreements is how much access to European markets Indian banks can expect to receive. Most European countries are restrictive when it comes to letting foreign lenders into their markets. In India, European banks have neglected rural areas. Although many European banks have been in India for over 140 years, their lending to agriculture, SMEs, as well as weaker sections has been quite negligible. In urban areas, the banks have failed to serve poor and low-income persons.

Free trade, a main component of globalization, has not necessarily meant fair trade, and this has enabled the rich and industrially advanced countries to benefit greatly in comparison to developing countries, such as India. The advanced countries have required developing countries to do away with trade barriers, while simultaneously been raising tariff and non-tariff barriers on trade from the developing countries. India, as we saw earlier, as many strengths. These strengths have caused many analysts to lump the country in with the so-called BRIC nations -- Brazil, Russia, India, China -- which are expected to become key global players. This puts India in a position to benefit from international trade and investment. (2)

One way in which India stands to gain is similar to the ways in which foreign multi-national's have gained by the country being open to foreign investments. India has the ability to build plants and industry on a global scale, but it must develop a blue print for how different industries can achieve productivity and efficiency comparable to the advanced countries. Indians makeup 16.7% of the world's population, despite that it encompasses just 2.0% of the world's land area. Therefore, there is a pressing need for India to develop long-range sustainability programs so as to best manage natural resources, such as land, water and minerals.

The people have benefited greatly also from many of these phenomena. The seven Indian Institutes of Technology are among the highest ranked in the world, and the Indian Institutes of Management offers jobs to its graduate that rival those offered to graduates of the top U.S. business schools. Still, a third of the country is illiterate, and three hundred million Indians live on less than 1$ a day. On the contrary, since 1985 more than 400 million have increased their standard of living, and now live on $5 a day. Over the next two decades, analysts predict that another 300 million will follow, should the economy continue to grow at a rate of seven percent a year. Moreover, next to the U.S. And Russia, India has the most dollar billionaires in the world.