GLOBALISATION AND THE INDIAN ECONOMY

Globalisation refers to the integration of countries through foreign trade and foreign investments by multinational corporations (MNCs). It affects the Indian economy by increasing competition, providing consumers with more choices, and allowing Indian companies to expand globally. For example, Indian markets now have a wide variety of goods from different countries, and Indian companies like Tata Motors have become multinationals.

MNCs spread production by setting up offices and factories in countries where they can get cheap labour and resources. They also collaborate with local companies, buy local companies, or place orders with small producers. For instance, Ford Motors set up a plant in India and exports cars to other countries, demonstrating global production integration.

Foreign trade connects markets of different countries, allowing producers to reach beyond domestic markets and consumers to access a wider range of goods. It leads to the integration of markets, as seen when Chinese toys entered Indian markets, offering more choices at lower prices but challenging local producers.

Technology, especially in transportation and IT, has made globalisation faster and cheaper. Improvements in container shipping and the internet allow goods and services to be produced and delivered globally. For example, a magazine designed in India for London readers is made possible through digital communication and air transport.

Trade barriers like taxes on imports are restrictions set by governments to regulate foreign trade. India imposed them post-independence to protect domestic industries from foreign competition, ensuring local producers could grow without being overshadowed by established foreign companies.

India removed trade barriers to make its producers competitive globally, improve product quality through competition, and attract foreign investment. This liberalisation was supported by international organisations and aimed at integrating India's economy with the world economy.

The World Trade Organisation (WTO) aims to liberalise international trade by establishing rules and ensuring they are followed. However, developed countries often retain unfair trade barriers, while developing countries like India are pressured to remove theirs, affecting sectors like agriculture.

Globalisation has benefited Indian consumers, especially in urban areas, by providing a greater variety of goods at lower prices. For example, the availability of international brands in electronics and automobiles has improved living standards for those who can afford them.

Small producers face stiff competition from MNCs and imports, leading to reduced sales and closures. Industries like toys and garments have been hit hard, with many small units shutting down and workers losing jobs, as seen in the case of capacitor manufacturers.

Globalisation has led to flexible employment practices, with workers hired temporarily and paid less, without benefits like health insurance. The garment industry exemplifies this, where workers face long hours and job insecurity due to competition among exporters to cut costs.

Fair globalisation ensures opportunities and benefits are shared equitably. Governments can achieve this by protecting workers' rights, supporting small producers, and negotiating fair trade rules at the WTO. Public campaigns have also influenced decisions to promote fairness in global trade.

Developed countries advocate for liberalisation to access new markets and cheap labour in developing countries, maximizing their profits. However, they often protect their own industries, highlighting the need for developing countries to demand fair terms in return.

SEZs are industrial zones with world-class facilities and tax incentives to attract foreign companies. By offering benefits like no taxes for five years and flexible labour laws, India encourages MNCs to set up production units, boosting employment and exports.

MNCs control production by setting up partnerships, using local suppliers, or buying local companies. They dictate prices, quality, and labour conditions, as seen in the garment industry, where small producers must meet the demands of large MNCs to stay in business.

Globalisation has expanded the IT sector, creating jobs in services like call centres and software development. Indian IT companies, such as Infosys, have become global players, offering services worldwide and contributing significantly to India's GDP.

Foreign investment involves MNCs spending money to acquire assets in other countries, like factories, aiming for profit. Foreign trade is the exchange of goods and services across borders, expanding market choices but not necessarily involving ownership or long-term investment.

Workers face job insecurity, lower wages, and poor working conditions as companies adopt flexible hiring to reduce costs. The shift from permanent to temporary employment in industries like garments has worsened workers' livelihoods, with little protection or benefits.

The government can provide better infrastructure, access to credit, and technology upgrades to help small producers compete. Policies ensuring fair competition and protection from unfair trade practices are also crucial for their survival and growth.

Liberalisation removes trade and investment barriers, facilitating globalisation by allowing free movement of goods, services, and capital. It encourages MNCs to invest in countries like India, leading to economic growth but also requiring adjustments to protect local industries and workers.

Globalisation promotes cultural exchange through the spread of products, ideas, and lifestyles across borders. For example, international food chains and entertainment have become popular in India, blending global and local cultures but also raising concerns about cultural homogenisation.

Proponents argue globalisation boosts growth, creates jobs, and improves living standards through access to global markets and technology. Critics highlight increased inequality, job losses in traditional sectors, and the dominance of MNCs over local businesses, calling for more equitable policies.

Students can raise awareness about the impacts of globalisation, support local products, and advocate for policies that ensure fair wages and conditions for workers. Engaging in debates and understanding global economic issues empowers them to push for changes that benefit all sections of society.