This was prepared by me as part of the topic assigned to me as part of the subject wise presentation

1. SubmittedBy
Aishwarya V Nair Agneya

2. Phase 1(1947-65)
• The focus was on government-led investments in manufacturing.
• Several large public sector units in steel, chemicals and power were set up.
• Many of these companies exist even today and are among the largest companies in their sectors.
Phase 2(1965-80)
• Government involvement in industry increased.
• Strong licensing laws were introduced with a sustained focus on import substitution.
• Public sector units and formation of several small-scale private sector manufacturing entities grew.
• Phase 3(1980-90)
• The government partially opened its economy to external trade and de-licensed some key sectors for private
participation, leading to strong growth in a few sectors.
• A key event was the formation of Maruti Suzuki as government’s 50:50 joint venture with Japan's Suzuki motors.

3. Phase 4 (Since early 1990s)
• The industry was further liberalized.
• The scope of licencing was significantly reduced.
• Custom duties were slashed.
• FDI in various sectors was opened up.
Phase 5(2000 onwards)
• Companies began to reap the rewards of the various phases of development learning.
• Many Indian business enterprises became quite competitive and looked at taking on global players.

4. Impact of Globalisation in India
• Greater competition among producers - both local and foreign producers has been of
advantage to consumers.
• There is greater choice before these consumers who now enjoy improved quality and lower
prices for several products.
• Foreign investment has increased.

5. Apart from this the other impact are explained in detail as below:-
Impact of Globalization on Agricultural Sector
• Raising living standards
• Alleviating poverty
• Assuring food security
• Making substantial contribution to the national economic growth.

6. Impact on Financial sector
• Financial intermediaries have come out of their traditional approach and they are ready to assume
more credit risks. As a consequence, many innovations have taken place in the global financial sectors
which have its own impact on the domestic sector also.
• The emergences of various financial institutions and regulatory bodies have transformed the
financial services sector from being a conservative industry to a very dynamic one.
• Growth in financial services (comprising banking, insurance, real estate and business services), after
dipping to 5.6% in 2003-04 bounced back to 8.7% in 2004-05 and 10.9% in 2005-06. The momentum
has been maintained with a growth of 11.1% in 2006-07.

7. Impact of globalization in industrial sector
• Globalization has increased across the world in recent years due to the fast progress that has been made in
the field of technology especially in communications and transport.
• The government of India made changes in its economic policy in 1991 by which it allowed direct foreign
investments in the country.

8. • 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.
• 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 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.

9. Globalization in modern sense came in the second World War. One of the main factors which led to
globalization was the plan by world leaders to break down the borders for forecasting trade relations between
nations.
This was a time when countries like India, Sri Lanka, Indonesia and some other countries in south America
gained independence as a result of which united nations organization(UNO) was established.
Another milestone in the history of globalization is the creation of World Trade Organization which led to the
growth of uniform platform to settle trade and commercial disputes.
Today India is one of the fastest growing economies with an average growth rate of 6-7%, increase in per
capita income and good standard of living and a reduction of 10% in poverty.
The service industry has a share of around 54% of the annual Gross Domestic Product while industrial and
agricultural sectors are around 29% and 17% respectively.

10. MEASURES TO PRAMOTE GLOBALIZATION IN INDIA
The measures adopted for globalization in India are as follows:-
Import Liberalization
• As part of liberalisation of foreign trade, import controls through licensing was abolished which helped
in free import of capital goods, raw materials, intermediate goods etc. without payment of custom
duties.
• Import duties on capital goods have been reduced below 20% on certain categories which led to
reduction in quantitative restrictions.
• This made a reduction on relatively high custom duties and led to the removal of quantitative
restrictions on imports which has reduced anti-export bias in earlier trade and balance of payment
policies.

11. Measure 2: Imports of Gold and Silver
• Import of gold and silver have been considerably liberalised, this reduced the incentive for smuggling
• In January 2004 imports of gold were made free from any commission charged for it.
Measure 3: Market-Determined Exchange Rate
• Devaluing of the rupee in July 1991 and after 2 years in 1993 exchange rate was changed from basket based
pegged exchange rate system to market determined exchange rate.
• By this the exchange rate is determined by demand and supply conditions in the foreign exchange market.
Measure 4: Convertibility of Rupee
• This was convertibility of rupee in balance of payments on current account was yet another reform for globalizing
the Indian economy.

12. • This implies the importers can get their required quantity of foreign exchange by converting the rupee
resources into dollars from foreign exchange market.
• Hence the exporters do not have to surrender their foreign exchange (US dollar or EU Euro) earned abroad to
RBI but can now sell them in foreign exchange market.
Measure 5: Liberalization of foreign investment
• Earlier investment by foreign companies required prior approval by the government and was restricted to
forty percent equity participation and was subjected to the condition of technology transfer to India.
• The new economic policy of 1991 provided for automatic approval of foreign direct investment i.e. no prior
permission from government is required upto 51% of the total equity capital of the firms in 32 priority
industries
• In 1996 the government raised the ceiling limit for automatic approval from 51% to 74% for foreign equity
participation

13. The steps taken towards globalization are as follows:-
i. Removing obstructions in MNC entry in India
ii. FERA (Foreign Exchange Regulation Act, 1973 was scrapped and Foreign Exchange Management Act
(FEMA) was passed to facilitate entry of MNCs
iii. Import liberalisation by reducing import duties (customs) in steps of 15% level
iv. Establishment of joint ventures by Indian companies other countries
v. Encourage export
vi. Removal of export subsidies

14. vii. Removal of quantitative restrictions on imports,
viii. Encourage foreign direct investments,
xi. Encourage NRIs, Foreign Institutional Investors (FIIs) and MNCs to invest in India,
x. Encouragement to Indian companies to raise capital in foreign countries by the GDR route (Global
Deposit Receipt)

20. MNC’s Invested in India