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Globalization in India

LPG reforms have opened India's economy to globalization, leading to positive changes such as the entry of private and foreign banks, increased foreign direct investment, and growth in the industrial sector. However, challenges include threats to local businesses, cultural impacts, monopolies by foreign firms, increased dependence on foreign trade, and regulatory difficulties. Addressing these challenges can help maximize the benefits of globalization for India's financial sector.

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Yashi Srivastava
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18 views1 page

Globalization in India

LPG reforms have opened India's economy to globalization, leading to positive changes such as the entry of private and foreign banks, increased foreign direct investment, and growth in the industrial sector. However, challenges include threats to local businesses, cultural impacts, monopolies by foreign firms, increased dependence on foreign trade, and regulatory difficulties. Addressing these challenges can help maximize the benefits of globalization for India's financial sector.

Uploaded by

Yashi Srivastava
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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LPG- Liberalization, Privatization and Globalization reforms made India open its economy to the

world for trade and commerce. The Globalization in LPG refers to integration of countries and make
them more connected. Globalization brought tremendous positive changes in India's financial sector.
Some of these impacts are mentioned below-
ENTRY OF PRIVATE AND FOREIGN BANKS - Private banks entered the banking centre which
promoted the healthy competition among banks. Though foreign banks were already present in
India, their numbers grew significantly after 1991.
FOREIGN DIRECT INVESTMENT - Globalization opened the doors of Indian businesses for foreign
investment and increased their funding sources. Today total FDI Inflows in country stood at $17.96
Bn.
GROWTH OF INDUSTRIAL SECTOR - With increased FDI, industries got more funds which eventually
helped them in arranging capital and spreading their businesses.
BOOSTED FORIGN TRADE - Foreign trade got a boost after globalization. Many new categories of
export and import were explored.
INCREASE IN EMPLOYMENT- With new categories of export and import there were various new job
created. Many people got employment in these new categories of jobs. Special economic zones and
GIFT city are such examples.
SPREAD OF INNOVATION - Many technical firms entered Indian market, established their campuses
here which helped in sharing of innovative ideas and technology transfer.

Globalization was proved beneficial for India in many aspects but brought some challenges with
itself-
THREAT FOR LOCAL BUSINESSES - Indian public started adopting foreign goods after globalization.
Many big foreign brands penetrated Indian market which was seen as a threat by local brands.
CULTURAL THREAT - Due to increased interconnectedness, globalization brought westernization
which was regarded as a cultural threat by some.
MONOPOLY OF BIG FORIGN BUSINESSES- Many big businesses established their monopoly at global
stage and used wrong means for decreasing their competitions.
INCREASED DEPENDENCE - Globalization increased dependence of Indian economy on foreign
trade.
DIFFICULT REGULATION - As foreign companies follow rules of their parent country and they have to
comply with Indian regulations too, there are instances of clash many times.

Globalizations made Indian economy connected with the world. There are many benefits that are
sown with some challenges that are faced. By taking prompt and adequate actions to fight these
challenges, globalization can be used at its best of Indian financial sector.

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