Globalization has been defined as the process of rapid integration of
countries and happenings through greater foreign trade and foreign
investment. It is the process of international integration arising from the
interchange of world views, products, ideas and other aspects of
The various beneficial effects of globalization in Indian Industry
are that it brought in huge amounts of foreign investments into the industry
especially in the BPO, pharmaceutical, petroleum, and manufacturing
industries. As huge amounts of foreign direct investments (FDI) were coming
to the Indian Industry, they boosted the Indian economy quite significantly.
The benefits of the effects of globalization in the Indian Industry are that
many foreign companies set up industries in India, especially in the
pharmaceutical, BPO, petroleum, manufacturing, and chemical sectors and this
helped to provide employment to many people in the country.
reduce the level of unemployment and poverty in the country. Also the
benefit of the Effects of Globalization on Indian Industry are that the
foreign companies brought in highly advanced technology with them and this
helped to make the Indian Industry more technologically advanced.
The various negative Effects of Globalization on Indian Industry are that it
increased competition in the Indian market between the foreign companies and
domestic companies. With the foreign goods being better than the Indian
goods, the consumer preferred to buy the foreign goods. This reduced the
amount of profit of the Indian Industry companies. This happened mainly in
the pharmaceutical, manufacturing, chemical, and steel industries.
negative Effects of Globalization on Indian Industry are that with the
coming of technology the number of labor required decreased and this
resulted in many people being removed from their jobs. This happened mainly
in the pharmaceutical, chemical, manufacturing, and cement industries. The
effects of globalization on Indian Industry have proved to be positive as
well as negative. The government of India must try to make such economic
policies with regard to Indian Industry's Globalization that are beneficial
and not harmful.
Benefits of Globalisation impacting India
Rise in Employment: With the opening of Special Economic
Zones, the availability of new jobs has been quite effective.
Furthermore, Export Processing Zones or EPZs are also established employing thousands of people.
Another factor is cheap labour in India. This has motivated big firms in the
west to outsource work to companies present in this region. All these
factors are causing more employment.
Surge in Compensation:After the outburst of globalization,
the compensation levels have stayed higher. These figures are impressive
as compared to what domestic companies might have presented. The level
of knowledge and skill brought by foreign companies is obviously
advanced. This has ultimately resulted in modification of the management
Improved Standard of Living and Better Purchasing Power: Wealth generation across Indian cities has enhanced since globalization
has fully hit the nation. You can notice an improvement in the
purchasing power for individuals, especially those working under foreign
organizations. Further, domestic organizations are motivated to present
higher rewards to their employees.
Therefore, a number of cities are experiencing better standards
of living together with business development.
Disadvantages of Globalization in India
The informal sector is purposely not listed in the labor legislation. For
example, informal workers aren’t the subject considering the 1948 Factories
Act. This scheme covers vital factors such as common working conditions,
safety, and health, the ban on child labor, working hours etc. Also,
globalization has caused poor health, disgraceful working conditions, as
well as bondage, happening in different parts of the country.
Impact Of WTO On Indian Economy
The World Trade Organization (WTO) is a global international organization
dealing with the rules of trade between nations. The work of WTO moves
around WTO agreements, negotiated and signed by the bulk of the world’s
trading nations and ratified in their parliaments. The goal is to help
producers of goods and services, exporters, and importers conduct their
India is a founder member of the General Agreement on Tariffs and Trade
(GATT) 1947 and its successor, the World Trade Organization (WTO), which
came into effect on 1 January 2012 after the conclusion of the Uruguay Round
(UR) of Multilateral Trade Negotiations. India's participation in an
increasingly rule based system in the governance of international trade is
to ensure more stability and predictability, which ultimately would lead to
more trade and prosperity.
The World Trade Organization (WTO) is a Multi-lateral organization which
facilitates the free flow of goods and services across the world and
encourages fair trade among nations. It is a 149-member organization that
represents all the trading nations of the world, who import-export goods &
services. The basic objective of WTO is to increase the global income as a
result of increased trade and the overall enhancement of the prosperity
levels of the member nations.
WTO came into formal existence on January 1st
1995. As an organization it has vast powers and functions than its
predecessor GATT (General Agreement on Tariffs and Trade). GATT came into
existence in the year 1948, immediately after the Second World War with 23
countries became the founder members. GATT provided platform for 8 trade
negotiations until 1994, the last trade negotiations, the Uruguay Round,
resulted in the creation of WTO.
Objectives of WTO:
The objective of the World Trade Organization is to help trade flow
smoothly, freely, fairly and predictably in order to meet its objective, WTO
performs the following functions:
- Administers WTO trade agreements.
- Acts as a forum for trade negotiations.
- Settles and handles trade disputes.
- Monitors and reviews national trade policies.
- Assists the member in trade policies through technical assistance
and training programmers.
- Provides technical assistance and training for developing countries.
- Co-operates with other international organization.
India is one of the founding member of WTO . There have been several
benefits for India along with few concerns by virtue of its participation in
the multilateral trading system within WTO.
Some of the benefits:
- WTO has helped India to improve its export competitiveness.
- Lower tariff barriers and market access has helped India to
integrate and participate in the global economy in a more efficient
- Transfer & Exchange of Technology, ideas etc. has been of tremendous
help for India in pursuit of its growth and development.
- Having market access has helped in reduction of cost and time which
would have otherwise required for bilateral trade negotiations.
- A well defined and structured dispute settlement mechanism also
makes it easier to settle the trade disputes.
However, at the same time WTO also poses some serious challenges to the
Indian agriculture. Issue of permanent “Peace Clause” and formula to
calculate food subsidy cap of 10% is yet to get clarified. Poor farmers are
bound to be at the receiving end that might be deprived of the subsidies
which they receive from the government in the form of Minimum Support Price
(MSP). Since India has recently ratified the Trade Facilitation Agreement
now they can't deny market access to the other countries.
It might prove
detrimental to the farmers to a certain extent because once the foreign
players enters the domestic market completely it would be a herculean task
for the Indian farmers to compete with them owing to their lack of
competence in terms of production, quality, technology, manufacturing cost
The World Trade Organization is playing an important role for administering
the new global trade rules in the following ways:
Trade Agreement: The WTO administers, through various councils and
committees, the agreements contained in the final act of the Uruguay Round,
plus a number of plurilateral agreements, including one government
Tariffs Rules: The WTO also oversees the implementation of significant
tariff cuts (averaging 40 percent) and reduction of non-tariff measures
agreed to in the trade negotiations.
Trade Watch Dog: The WTO is a watchdog of international Trade, regularly
examining the trade regimes of individual members. In its various bodies,
member’s flag proposed or draft measures by others that can trade conflicts.
Members are also required to notify in detail various trade measures and
statistics which are maintained by the WTO in a large data base.
Various Conciliation Norms: The WTO provides several conciliation
mechanisms for finding an amicable solution to trade conflicts that can
arise among members.
Trade Disputability Settlement: Trade disputes that cannot be solved
through bilateral talks are adjudicated under the WTO Dispute Settlement
Court Panels of Independent expert are established to examine disputed in
the light of WHO rules and provide rulings .This tougher streamlined
procedure ensures equal treatment for all training patterns and encourages
members to live up to their obligations.
WTO is consultant body: The WTO is a management consultant for world
trade. Its economists keep a close watch on the pulse of the global economy
and provide studies on the main trade issues of implementation or Uruguay
Round results through a newly established Development division and
strengthened technical co-operation and training division.
Checks Of Trade Barriers: The WTO will be forum where countries
continuously negotiate exchange of barriers all over the world. And the
WTO already has a substantial agenda for further negotiations in many
Impact of WTO on Indian Economy:
- Help to promote peace between the Nations.
- Disputes are handled constructively.
- Rules make it easier for all WTO based on rules not on power.
- Free trade cut the cost of living provides more choice of production
- Trade stimulates economic growth.
- Rate raises income of country and its people.
- Basic principles make life more efficient.
- System encourages good governance.
Favorable impact of WTO on Indian economy:
The Agreement of Agriculture (AoA) can generally be classified into four
(a) Imposition of import duties.
(b) Withdrawal of Quantitative Restrictions (QRs).
(c) Economic help admissible under WTO.
(d) Export subsidies.
(a) Imposition of Import Duties: The earlier GATT had a provision of trading
in agricultural produce also, but it did no facilitated in providing free
trade regime around the world. It was allowed to levy import duties and
import quotas for restricting import and export subsidies as incentives to
boost traditional exports and protect the domestic activities. Fishery,
forestry, rubber, jute, sisal, coir and abaca were not covered under the
traditional agricultural exports.
- Increase in export earnings:
(i) growth in merchandise export: the establishment of the has increased
export of developing countries because of reduction in tariff and non tariff
trade barriers India's merchandise have increased.
(ii) Growth in service export: WTO introduced the GATT that proved
beneficial for countries like India.
- Textile and clothing: The phasing out of the multi fibre arrangements
will help the developing countries like India to increase export of textile
- Foreign direct investment: As per the TRM agreement restrictions on
foreign investment have been withdrawn by the member nations of the WTO this
has benefited developing countries by way of foreign direct investment Euro
qualities and portfolio investment in 2008 and 2009 the net foreign direct
investment India was 35 million US $.
Unfavourable impact of WTO on Indian economy:
TRIPS (trade related aspects of intellectual property) Protection of intellectual property rights has been the major concern of
WTO as a member of WTO India has to comply with the TRIPS standards however
the agreement on TRIPS goes against the Indian patent act 1970 in following
ways pharmaceutical sector and agriculture.
Trade related investment measures (TRIMs) The agreement on TRIMs also famous developing Nations as there are no rules
in the agreement to formulate International rules for controlling business
practices of foreign investors also complying with the TRIMs agreement will
contradict objective of self reliant growth based on locally available
technology and resources.
GATS (General agreement on trade in services) The agreement on GATS will also favour the developing Nations more. Thus,
the rapidly growing service sector in India will now have to complete with
giant foreign firms. Moreover, since foreign firms are allowed to remove
their profits, dividend and royalties to their parent company, it will cause
foreign exchange burden for India.
Trade and Non tariff barriers Reduction of trade and non tariff barriers has adversely affected the export
of various developing Nations. Various Indian products have been hit by non
tariff barriers. These include textile, Marine product, floriculture,
pharmaceutical basmati rice, carpet, leather goods etc.
Impact of Globalisation on Environment and natural resources
Globalization has had far-reaching effects on our lifestyle. It has led to
faster access to technology, improved communication and innovation. Apart
from playing an important role in bringing people of different cultures
together, it has ushered a new era in the economic prosperity and has opened
up vast channels of development.
However, globalization has also created
some areas of concern, and prominent among these is the impact that it has
had on the environment. Globalization has featured extensively in the
debates on environmentalism, and green activists have highlighted its
Activists have pointed out that globalization has led to an increase in the
consumption of products, which has impacted the ecological cycle. Increased
consumption leads to an increase in the production of goods, which in turn
puts stress on the environment. Globalization has also led to an increase in
the transportation of raw materials and food from one place to another.
Earlier, people used to consume locally-grown food, but with globalization,
people consume products that have been developed in foreign countries.
amount of fuel that is consumed in transporting these products has led to an
increase in the pollution levels in the environment. It has also led to
several other environmental concerns such as noise pollution and landscape
intrusion. Transportation has also put a strain on the non-renewable sources
of energy, such as gasoline. The gases that are emitted from the aircraft
have led to the depletion of the ozone layer apart from increasing the
The industrial waste that is generated as a result of
production has been laden on ships and dumped in oceans. This has killed
many underwater organisms and has deposited many harmful chemicals in the
ocean. The damage caused to ecosystem from the oil that spilled from one of
the leaking containers of British Petroleum in 2010 is just one of the
examples of the threat globalization poses to the environment.
Due to globalization and industrialization, various chemicals have been
thrown into the soil which has resulted into the growth of many noxious
weeds and plants. This toxic waste has caused a lot of damage to plants by
interfering in their genetic makeup. It has put pressure on the available
land resources. In various parts of the world, mountains are being cut to
make way for a passing tunnel or a highway.
Vast barren lands have been
encroached upon to pave way for new buildings. While humans may rejoice on
the glimmer with these innovations, these can have long-term effects on the
environment. Various studies over the years, have found that plastic is one
of the major toxic pollutants, as it is a non-biodegradable product.
However, plastic is of immense use when it comes to packaging and preserving
goods that are to be exported. This has led to increased use of plastic,
causing widespread environmental pollution.
It has made so many changes in our lives that reversing it is not possible
at all. The solution lies in developing effective mechanisms that can check
the extent to which it can impact the environment. Researchers are of the
view that the answer to this problem lies in the problem itself, that is,
globalization itself can lend support to building a better structure which
is economically feasible and environment-friendly. Globalization is about
competition, and if certain privately owned companies can take the lead in
being environment friendly.
Globalization is a process of globalization that participates in the
exchange of information, material goods and ideas throughout the world.
Since 1960, there has been an acceleration of international exchanges and
the dissemination of the same political, cultural and economic models.
Global trade growth is based on intensive exploitation of natural resources
and on polluting modes of production and transport. However, globalization
also allows the growth and development of new markets: this is the case for
fair trade. Since 1950, almost half of the tropical forests have been
Destruction arises due to globalization are:
- Deforestation: Today between 75,000 and 200,000 square meters of
forests are destroyed. We must not forget that wood is a raw material
for industry. Deforestation thus appears as a solution to gain space and
produce more and to allow the development of certain countries.
- The depletion of water: The 20th century was marked by an explosion
of water consumption due to strong population growth, an increase in the
standard of living and a high level of agricultural
production. Freshwater comes in two forms: Underground aquifers (basin,
groundwater) as well as lakes, rivers and rivers. Overexploitation,
which must respond to the ever-increasing needs of industry, agriculture
and private individuals, is the very important and poorly controlled
drain in groundwater that is not renewed on the scale of human time.
- The water pollution: Domestic and industrial uses lead to
bacteriological pollution of water. Industries emit water loaded with
metals and chemicals. Agriculture charges water to nitrate due to the
release of fertilizer. Thus, water pollution is due to the search for
productivity in agriculture and industry.
- Depletion of fishery resources: In recent years there has been a
resurgence of endangered marine species. Overfishing, tools, and
pollution of the seas and oceans are largely responsible for this
depletion. The overexploitation of fishery resources has led to the
proportion of species in danger rising from about 10% in the 1970s to
24% today ¾ of the world’s fishery resources are currently caught at
their maximum rate above sustainable levels. With its heavy
environmental consequences, over exploitation is also felt for the
We cannot say that the impact of globalization has been totally positive or
totally negative. It has been both. Each impact mentioned above can be seen
as both positive as well as negative. However, it becomes a point of concern
when, an overwhelming impact of globalization can be observed on the Indian
culture. Every educated Indian seems to believe that nothing in India, past
or present, is to be approved unless recognized and recommended by an
appropriate authority in the West.
There is an all-pervading presence of a positive, if not worshipful,
attitude towards everything in western society and culture, past as well as
present in the name of progress, reason and science. Nothing from the West
is to be rejected unless it has first been weighed and found wanting by a
Western evaluation. This should be checked, to preserve the rich culture and
diversity of India.