Effects of Globalization on Indian Economy
Introduction
The term Globalization was coined in 1960s by Theodore
Levitt, a former professor from Harvard Business School.
Globalization is a process, which involves economic
interdependence of countries worldwide removing all
barriers for economic integration.
Indian Economy before Globalization
There were stringent controls on the import of a large
number of a large number of commodities, and likewise controls
over foreign investments through a complicated licensing
system which in most cases did not allow more than 40
percent of the equity in any company to be held by foreign
capital. In this sense it could be said that there was considerable
state intervention in the economy. The system – popularly known
as ‘license-permit raj’ – provided a protected environment in
which domestic industry could develop and grow.
During the budget of 1991 the then finance minister Dr.
Manmohan Singh introduced economic liberalization (P V
Narasmha Rao). This led to the full-fledged integration of
Indian economy with global economy. In other terms
introduction of economic liberalization led India towards rapid
globalization. (Include point about Free Trade point).
To globalize themselves different countries take trade
related measures and developmental policies so as to
increase cross border trade relations. The same way, Indian
government also took 4 major measures to encourage
Globalization:
i) Reduction of trade barriers so as to permit free flow of
goods across national frontiers;
