Indian Economy – Going Global

INTRODUCTION

Globalization in India started in the early 1990s. Industrialization is the reason behind globalization. Business is the key. When a company operating in a nation of origin establishes its subsidiary in other nations (host countries), it becomes a multinational and there begins the process of globalization in which a local company serves the whole world with its products and services. The advent of the Internet and the resulting “new economy” has opened up a plethora of new business opportunities and an “inevitable” number of business losses. Shapiro and Varian (1999) argue that while technology changes, economic laws do not. This is globalization in the perspective of the company. Globalization in India has transformed the system of the country. Today, India is seen as a country dominated by economy rather than driven by politics as it was before. Political dominance has dropped significantly these days. India’s embrace of globalization and liberalization principles has broadened the horizon of the country’s consumers all over the world. Consumers in India have become more aware. Market information in India has become clear.

Liberalized policies have led the industrial sector to grow at a faster rate. The BPO, IT, ITES, Retail and Insurance sectors have performed well. Both men and women have the same opportunities in this sector. India’s success is the reduction of gender inequality in India. Also, the development in education and awareness is greatly marked in the country in the age of globalization in India.

INDIAN ECONOMY – HIGHLIGHTS

• India is among the five countries that share 50 percent of world output (or GDP).
• FDI inflows have nearly tripled to US$15.7 billion in 2006-07 from US$5.5 billion in 2005-06.
• The aggregate revenue of the top 500 companies increased 28.4 percent in 2006-07 to a total of US$469.51 billion.
• The National Stock Exchange of India (NSE) ranks first in equity futures trading and second in index futures trading in the world.
• Twenty Indian firms have made it to Boston Consulting Group’s 100 New Global Challenger Giants list.
• According to a study by the McKinsey Global Institute (MGI), India’s consumer market will be the fifth largest in the world (from twelfth) in the world by 2025.
• The number of incorporated companies has increased at an annual average of 55,000 companies in the last two years to 865,000, from 712,000 companies at the end of 2005.
• Four Indian and seven Indian microfinance companies make it to the Forbes list of the top 10 richest CEOs in the world and the top 50 microfinance institutions in the world, respectively.
• India has the largest number of private equity (PE) funds operating among the BRIC markets.
• Mumbai has been ranked 10th among the world’s largest trading hubs in terms of financial flow volumes according to a survey compiled by MasterCard Worldwide.

Another significant aspect has been the broad-based nature of the growth process. While new economy industries such as information technology and biotechnology have been growing at about 30 percent, significantly older sectors of the economy, such as steel, have also been major contributors to the process. India’s growth. For example, India has risen two places to become the fifth largest steel producer in the world. And with its manufacturing and services sectors on a breakneck growth path, Lehman Brothers Asia estimates that India will grow as much as 10 percent each year over the next decade.

CONTRIBUTION OF INDUSTRIES TO THE INDIAN ECONOMY

The industrial revolution is the springboard to globalization. In India, the contribution of different sectors is immense and they all contribute to the rapid growth of the Indian economy.

IIP data shows that during April-November 2007, cotton textiles grew 5.5 percent. During 2006-07, textile exports recorded an increase of 6.9 percent over 2005-06. During April-October 2007, textile exports increased marginally by 1.49 percent year on year. The Indian government has provided many subsidies to the textile industry through various fund schemes and textile parks. The growth rate of the paper industry rose to 8.7 percent during 2006-07, but fell to 1.6 percent between April and November 2007.

Leather products, which contribute significantly to employment generation and export earnings, recorded an impressive growth of 12.2 percent during April-November 2007. The chemical industry is growing steadily at 10 percent. The value of pharmaceutical production increased more than tenfold, from Rs 5 billion in 1990 to more than Rs 65 billion in 2006-07. India is now recognized as one of the world’s leading players in pharmaceuticals. While the production of rubber footwear grew by 4.7 percent, that of sheets (PVC/rubber) grew by 18.8 percent. PVC tubes and pipes, which have the largest weight in the group of products, grew by 27 percent during April-November 2007. Crude oil production during April-November 2007 was 22.69 million tons ( MT) compared to 22.56 MT during the corresponding period in the previous year, showing a marginal increase of 0.60 percent. In this sector, the demand will always be higher than the supply and India needs to divest and encourage private players like Reliance to enter the oil industry.

The cement industry registered a growth of 7.72 percent (provisional) during April-November 2007. Production increased from 99.99 MT during April-November 2006 to 107.71 MT during April-November 2007. Indian steel companies have marked their diversified presence in the world market. market, effected mainly through the establishment of state-of-the-art plants, continuous modernization and improvement of the energy efficiency of the plants. Mittal Steel has caused a stir around the world with its recent merger with Arcelor. While global industrial production grew by 9 percent during April-December 2007, the production of capital goods increased significantly by 20.2 percent compared to 18.6 percent during the same period in 2006. Services they grew 10.5 percent in April-September 2007, thanks to 11.6 percent during the corresponding period in 2006-07. Manufacturing grew 9.6 percent during April-December 2007, thanks to 12.2 percent growth during the same period in 2006-07. The core infrastructure sector continued its growth rate posting 6 percent growth in April-November 2007. While exports grew 21.76 percent during April-December 2007, imports increased 25.97 percent. cent in the same period.

ROLE OF INFORMATION TECHNOLOGY

The IT/ITES industry’s contribution to the country’s GDP has been steadily increasing from a 1.2% share in FY98 to 5.2% in FY2007; it has contributed to the country’s foreign exchange reserves by increasing exports by nearly 36% and its direct employment has grown at a CAGR of 26% over the past decade, making it the largest organized private sector employer in the country. country.

Over the past two decades, the Indian IT/ITES industry has contributed significantly to Indian economic growth in terms of GDP, foreign exchange earnings and employment generation. The industry has been the trigger for many “firsts” and has contributed not only to unlocking the hitherto untapped entrepreneurial potential of the Indian middle class, but also to bringing Indian excellence to the global marketplace.

The current and evolving role of the IT/ITES industry in the Indian economy is well established. The sector is proving to be the main pole of growth within the services sector, which in turn drives various economic indicators of growth in the country. Export revenues in FY08 were approximately USD 40 billion with a growth of 36%. Direct employment in the sector is expected to be 2.0 million by the end of fiscal year 2008, growing at a CAGR of 26% over the last decade, making it the largest employer in the organized private sector in the country. The IT industry is leading India globally.

CONCLUSION

According to some experts, the US share of global GDP is expected to decline (from 21% to 18%) and India’s share to rise (from 6% to 11% in 2025), thus The latter will emerge as the third pole of the global economy after the US and China.

The Indian economy experienced GDP growth from 9.0 per cent during 2005-06 to 9.4 per cent during 2006-07. By 2025, India’s economy is projected to be about 60 percent the size of the US economy. The transformation into a tripolar economy will be complete by 2035, with the Indian economy only slightly smaller than the US economy but larger than Western Europe’s. By 2035, India is likely to be a bigger engine of growth than the six largest EU countries, although its impact will be just over half that of the US.

India, now the fourth largest economy in terms of purchasing power parity, will overtake Japan and become the third largest economic power within 10 years.

A large number of global multinational brands such as Coca-Cola, Google, Microsoft and Mercedes-Benz have successfully operated in India. Indian brands that previously operated locally in India have started to compete internationally. From New Delhi to New York, brands have gone global. The pattern of consumption in India has also changed. The level of spending on private consumption has been growing significantly. Young consumer spending in India is considered as the most powerful consumers. In an era of globalized environment, the country has become a major player in the socio-economic fields of a mere third world country. BRIC and other reports have forecast that India will be the third largest economy by 2020. Everything looks ominous for India.