ASSIGNMENT

ON

GLOBALISATION

PRESENTED BY DEEPAK SINGH PGFA0914 SEC A

GLOBALIZATION is the process of international integration of products, technologies, human resources, capital, information and cultures. It is characterized by increasing social and economic openness and growing interdependence the countries of the world. As globalization progresses, economic, social, and political systems of different countries more freely interact with one another and adapt to promote further interaction. GLOBILIZATION TRENDS Indian economy has been gradually opening up to economic reforms. Under this globalization for the economy has been slow but clear. In India main measures taken in the direction of globalization are as follows1 Trade liberalisation through reduction in import tariffs, removal of quantitative restriction on imports, incentives for exports and simplification and stanardisation of trade procedures. 2 Liberalization of norms for the entry of multinational corporations foreign direct investment. 3 Liberalization of foreign exchange management regime. 4 Greater freedom to foreign institutional investors to participate in the money and the capital markets. 5 Widening, deepening and streamlining of foreign exchange market . ADVANTAGES OF GLOBALIZATION Larger markets Globalization provides larger markets to domestic producers by way of exports. Domestic firms develop international marketing channels to export products. Since domestic and foreign demand and competitive situations vary, domestic firms are able to realize high prices from foreign markets. Greater specialization Globalization provides motivation to domestic firms to specialize in areas where they have competitive advantage. Each firm enjoys advantage in certain functional or product areas where it has good competence to compete in the market. To stay in competition, globalization provides a good inducement to firms to remain close to their competence areas. Price stabilization Globalization reduces international differences in price levels. Theoretically, when a export-surplus company trades with a deficit country, prices tend to recover in the former and come down in the latter country.

Outsourcing Globalization provides many sourcing advantages. Firms with worldwide contacts are able to do global sourcing for funds and reduce the cost of capital. Firms can outsource technology, distribution and even consumer research .These advantages enhance operational efficiency. International investment inflow Countries with a high degree of globalization tends to have larger international investment inflow. For the recipient country, foreign investment supplements domestic resources, brings in foreign exchange, improves balance of payments. DISADVANTAGES OF GLOBALIZATION International economic problems like inflation, unemployment, recession and currency depreciation tend to spread among globally integrated countries, through international influence. Dependence It raises the degree of dependence or interdependence resulting in lesser control over the domestic economy. Developing economies, face the problems associated with foreign economic dominance. Reducing domestic competition Globalization through foreign direct investment and multinational companies might erode the domestic production base. These resourceful but uncompetitive firms might be acquired by foreign firms thereby reducing competition. Exploitative character of trade Globalization has been instrumental in the drain of basic raw materials through low value added exports. Globalization tends to transfer talented human resources from the less developed to industrial countries. The brain drain is one of their formidable problems. Unemployment As countries and companies tends to move into their competitive advantage and as technological upgradation takes place, unemployment tends to swell among low skilled workers. This results into greater income inequality, poverty, social unrest and larger unemployment. Pros and Cons of globalization to India as per you As per my understanding and analysis globalization to India has been good and it is in the interest of the country, but one can not also ignore its disadvantages. Some positive points about globalization are as follows1 It has helped India to exports its product to foreign markets 2 As competition keeps prices low, India has been benefited by less inflation except on some rare occasions. 3 It has created lots of job opportunities for youth over here, for eg BPO, IT etc.

Some disadvantages faced by the country are as follows1 With the entry of multinationals in the market, small time producers has been affected a lot. 2 Income generated in India is not always spent over here. For example, Money earned from call centre in India is not spent in India but maybe in UK or US. 3 Globalization has resulted into competion. foreign multinationals are giving tough competion to Indian companies, making their existence difficult.