This document provides an overview of India's increasing globalization and integration with other regions and economies. It discusses India's historic global trade connections dating back thousands of years, its opening to global markets in the 1990s, and its growing trade and investment ties since then. Key points include India experiencing a deepening of both trade and financial integration globally, growing inward foreign direct investment, and expanding trade agreements. Challenges discussed include a current account deficit, inflation concerns, and barriers to doing business. The conclusion compares India and China's potential to shape global politics and economics in the 21st century.

2. India & Globalization
Colleen Litkenhaus, Horochi Ogan, Phil Njowusi, Hugues Regal, Bipin Kumar

3. Welcome to India!

4. Agenda
1. Globalization - Historic
2. India
3. India and Asia
4. India and Africa
5. India – Europe & ME
6. India and the Americas
7. Conclusions

5. Globalization
• A process:
– through which an increasingly free flow of ideas, people, goods,
services and capital would lead to the integration of economies and
societies.
• It is characterized by:
– an accelerated flow of trade, capital, and information, as well as
mobility of individuals across geographical borders.
• It reflects:
– comprehensive level of interaction than that has occurred in the past,
suggesting something beyond the word “international”.
• It implies:
– a diminishing importance of national borders and strengthening of
identities, that stretch beyond those rooted in a limited locale in terms
of particular country or region.

6. Globalization

7. 1. Globalization - Past
Globalization – Phase I
Ancient: 326 BC
Ancient: 1st century CE
Alexander’s invasion Roman and Greek: Ptolemaic period. Trade for silk & spice

8. 1. Globalization - Past
Globalization – Phase I
Medieval: Silk road & Spice Route
Routes blocked by Ottoman empire in 1453, spurring the age of exploration

9. 1. Globalization - Past
Globalization – Phase I
Discovery of much of the world was spurred by search for sea-routes to India
• Spice Trade – In the search for India:
– 1497: Vasco da Gama [Portugal] - India
(Calicut)
– 1492: Christopher Columbus [Spain] –
America
– 1500: Pedro Alvares Cabral [Portugal] –
Brazil
• European-India companies
– 1602: Dutch East India Company
– 1664: French East India Company
– 1707: British East India Company

10. 2. India
India Today – cultural
Unity in Diversity
• 1.2Bn people, 3270000 sq.km
• 28 states, 7 Union territories
• 30% of the country’s 1.2 billion inhabitants reside in urban
• 22 official languages, 1576 official 'mother tongues',
• 7 major religions, birthplace of 4,
– Islam: 2nd largest religion in India; 3rd largest
Muslim populace in the world,
• Has the most recognized piece of Islamic architecture
– Christianity: 3rd largest religion in India
• It has the world's oldest Catholic church,
• There are only three Basilicas built over the tomb of an
apostle.- St. Peter's at Rome, St. James’ at Santiago, St.
Thomas’ at Chennai
– Buddhism: Born in India; Dalai Lama has his base there
– Parsis: 75% of Zoroastrians of the world (original
inhabitants of Iran)

11. 2. India
90’s Liberalization
• India opened up the economy in the early
nineties following a major crisis that led by a
foreign exchange crunch, dragged the
economy close to defaulting on loans.
• Major measures initiated as a part of the
liberalisation and globalisation strategy in the
early nineties included:
– scrapping of the industrial licensing regime,
– reduction in the number of areas reserved for
the public sector,
– amendment of the monopolies and the
restrictive trade practices act,
– start of the privatisation programme,
– reduction in tariff rates and change over to
market determined exchange rates.

12. 2. India
Globalization
• A metric frequently used to
measure the degree of a country’s
global integration is the ratio of India's global integration
Export+Import/GDP Two way(capital+current) flows/GDP
external trade to GDP 120%
109%
– ratio has gone up over four times, 100%
from 8 per cent of GDP in 1972 to
37 per cent in 2011 80%
• A more complete measure of a 60%
country’s global integration is the
37%
two way flow of goods and finance 40%
in and out of a country. 20% 14%
8%
– ratio has moved up nearly eight
times in these four decades, from 0%
14 per cent in 1972 to 109 per 1972-73 2010-2011 1972-73 2010-2011
cent in 2011
• This means that India’s trade
integration has been deep; but its
financial integration has been
deeper.

13. 2. India
Inward FDI
• Enjoyed the second highest growth in foreign direct investment (FDI) inflows in the world during
2011
• India stands as the fourth most attractive destination for FDI in E&Y's global ranking (dropped 2
places from year before).
Sector Amount (USD) Country Amount (USD)
Services 5.05 billion U.S 11.2 billion
Pharmaceuticals 3.21 billion Mauritius 9.42 billion
Telecom 1.99 billion Singapore 5.07 billion
Construction 2.52 billion Japan 2.86 billion
Power 1.61 billion UK 2.75 billion
Metallurgical ind 1.76 billion Germany 1.54 billion
Cyprus 1.42 billion
Source: IBEF, DOC

14. Trade agreements in place
Agreement on Economic Cooperation between India and Finland Treaty of Transit between India and Nepal
Agreement on South Asia Free Trade Area SAFTA Agreement on implementation of India – Malaysia CECA
Asia Pacific Trade Agreement APTA Framework Agreement with ASEAN
CECA between The Republic of India and the Republic of Singapore Framework agreement with Chile
Comprehensive Economic Cooperation Agreement between India and Framework Agreement with GCC States
Malysia
Global System of Trade Preferences GSTP Framework Agreement with Thailand
India Africa Trade Agreement India EU Trade and Investment Agrement TIA
India Chile PTA India US Trade Policy Forum Joint Statement
India Afghanistan PTA India and Australia Joint Free Trade Agreement Feasibility
Study
India ASEAN Agreements India Bangladesh Trade Agreement
India Bhutan Trade Agreement India Ceylon Trade Agreement
India Japan CEPA PDF India DPR Korea Trade Agreement
India Korea CEPA PDF India EU Strategic Partnership Joint Action Plan
India MERCOSUR PTA India Indonesia Joint Study Group Report
India Nepal Trade Treaty PDF download India Maldives Trade Agreement
India Sri Lanka FTA India Mongolia Trade Agreement
SAARC Agreement on Trade in Services SATIS India New Zealand Joint Study Report
India United States Commercial Dialogue India Pakistan Trading Arrangement

15. Currently Negotiating Agreements
Association of South East Asian Nations (ASEAN) and India Free Trade
Agreement (FTA) negotiations India-MERCOSUR Preferential Trade Agreenent (PTA) Negotiations
India-Sri Lanka Comprehensive Economic Partnership Agreement
(CEPA) negotiations India-Pakistan Trading Arrangement
India-Thailand Comprehensive Economic Cooperation Agreement
(CECA) negotiations India-EU Board Based Trade and Investment Agreement negotiations
Bay of Bengal Initiative for Multi-Sectoral Technical and Economic India European Free Trade Association (EFTA) Negotiations on broad
Cooperation (BIMSTEC) Free Trade Agreement (FTA) negotiations based Bilateral Trade and Investment Agreement
India-Gulf Cooperation Council (GCC) Free Trade Agreement (FTA)
negotiations Global System of Trade Preferences (GSTP)
India-Mauritius Comprehensive Economic Cooperation and
Partnership Agreement (CECPA) negotiations Asia Pacific Trade Agreement (APTA)
India-SACU Preferential Trade Agreement (PTA) negotiations India -New Zealand Free Trade Agreement
India-Canada Comprehensive Economic Partnership Agreement
India-Singapore Comprehensive Economic Cooperation Agreement (CEPA)
India-Australia Comprehensive Economic Cooperation Agreement
Expension of India-Chile Preferential Trade Agreement (PTA) (CECA)
India-Indonesia Comprehensive Economic Cooperation Agreement
(CECA)

16. 2. India
GDP
Source: IMF WEO WEO Apr 12
Source: IMF Apr 12 GDP (Sectorwise)
GDP Growth (%)
Historic GDP (growth %)
Agriculture
• 2nd fastest growing 12 12
GDP growth rate (% by sector)
10 10.623
economy 10
10 12% 17% 9 9.53
9.033 7.2
9.991 9.2
Mining
9
7.9
2%
88
8
• Among the top 5 6 17% 6.852
7.591 7.241
6.186 6.579
6 Manufacturing
64
economies by 2020 4
2.7
5.158
4.558 0.4
15%
2
4
• Services sector
3.885 Electricity, Gas, Water
2 0
2
-2
contributes to a 0
-4
27% 8% 2%
0 2010 -3.1
2011 2012 2013 2014 2015 2016 2017
significant part Source: Ministry of Statistics and
2000 2001 2002 2003
Programme Implementation, GOI 2004 2005 2006 2007 2008 2009 2010 2011
Q3 2011
• Manufacturing is going Brazil Russia India China U.S
Q3 2011 from Q32010
down – area of concern

17. 2. India
Inflation
• The rise in inflation
expectations is one of the Source: IMF WEO Apr 12
Source: Ministry of Statistics and
Programme Implementation, GOI
Inflation (%)
Inflation Jan-Jun 12
key macro stability 14 10
9.5
12
challenge. 10
9
8.5
• Highest inflation among 8 8
7.5
BRIC, but it goes lower 6
7
4 6.5
over the next 5 years 2 6
5.5
0
5
2010 2011 2012 2013 2014 2015 2016 2017
January February March April May June
Brazil Russia India China US

18. 2. India
Current Account Balance
Source: IMF WEO Apr 12
CAB (%)
• India has a CA deficit of 6
5
close to 3.5% of the GDP 4
• Deterioration in India’s 3
current account deficit: 2
1
– from $45.9 billion (2.7% 0
of gross domestic product) -1
in FY11 -2
– to estimated $74.3 billion -3
(4% of GDP) in FY12 -4
2010 2011 2012 2013 2014 2015 2016 2017
• Because of higher oil and
Brazil Russia India China US
gold imports

19. 2. India
Debt-to-GDP ratio
Source: IMF WEO Apr
12 Debt to GDP (%)
• India: has the lowest 120
– But last year’s has been
pegged at 74% instead of 67% 100
• US: has the highest 80
– But last years was 102%
60
instead of estimated 106%
40
20
0
2011 2012 2013 2014 2015 2016 2017 2018
France Germany India Spain United States

20. 2. India
Indian Currency Movement
• The Indian Rupee has depreciated
against all the major international
currencies since the beginning of the
last fiscal year.
• The Indian Rupee has depreciated by
– 25% against the Dollar,
– 18%, against the British Pound
– 8% against the Euro and
– 32% against the Yen respectively.

21. 2. India
Polarity
• The wealth of high net worth individuals (HNIs) in
India, is set to grow by a compounded annual growth
rate (CAGR) of 23 per cent over the next four years
and will touch a staggering Rs 249 trillion (US$ 4.69
trillion)
• 350 million people below poverty line
• Cut-off for poverty line
– 29 rupees, or 55 cents, a day in urban areas
– 22 rupees or about 40 cents a day in rural areas
• Electricity sector in India had an installed capacity of
202.98 GW as of May 2012, the world's fifth largest
– 300 million people have no electricity
• Gives $10Bn to Europe,
– Has a Balance of Payments problem

22. 2. India
Pessimism: The smoke, the fire!
• Fire:
– GDP growth has touched a 10 year low of 6.1% for
FY12
• Smoke:
– IIP growth of 0.1% for April’12
– consistently high inflation that stands at 7.55% in the
latest May’12 data and is higher than 7.23% recorded
in April’12
• Effect:
– in the fight between taming inflation and propelling
growth India is losing out on both

23. Hurdles to doing business in India
• Difficult business climate (World Bank)
– ranks 132 out of 183 economies in 2012
– next to last in enforcing contracts
• little progress in recent years in
improving market access
• Import duties comparatively very high
• Non-transparent and unpredictable
regulatory and tariff regimes.
• A cumbersome bureaucracy
• Corruption

24. 2. India
Nationalization/National Integration
• As important as Globalization
• Political and cultural integration within India
• The exchange of
trade, culture, ideas, ethics, beliefs, etc. between
the various states, races, cultures of India
– Each unique in its own manner
– Brings its own advantages and disadvantages
• Cities are a melting pot of cosmopolitanism
– Like New York; most cities have large concentrations
of other state folk; bigger cities have a growing
International ethos

25. Education
Share of 25-34 year-olds with a tertiary degree
across OECD and G20 countries (2000, 2010, 2020)
• 25% of its population is still illiterate; only
15% of Indian students reach high
school, and just 7%, of the 15% who make
it to high school, graduate
• India produced 11% of graduates in
2010, expected produce 12% of the share
of graduates by 2020
• Education in India is provided by the
public sector as well as the private
sector, with control and funding coming Source: OECD,
from three levels: central, state, and local.

26. India - Asia

27. China & India
Politics and World Economy
The Dragon and the Tiger
-- Match of the 21st Century?...
• Until 1800 these 2 economies used
to make up 1/2 the world economy...
• How their relationship will shape
world politics & the world economy –
• “Shame they do not get on better"...
• Lots of expectation by Washington
for India to assume a more active
role as a regional balancer vis-à-vis
China.
• New Delhi is far less eager to pursue
this position against its northern
neighbor
•

28. Indian Trade with China
• China is India’s 2nd largest
trading partner.
Indian Exports to China:
• Driven by iron ore
Chinese exports to India
• Driven by machinery
Total Trade values:
Total Trade values
2009-10 $42.4b
2010-11 $16.1b

29. India and China’s new bilateral trade in Oct 2010:
• Agreed to a new bilateral
trade
• up from $100b target by
2015
• from $60bn in 2010.
• The two sides agreed to take
measures to promote greater
Indian exports to China
• To reduce India's trade deficit.
• Companies signed business
deals worth $16bn on the
opening day of Chinese PM
Wen Jiabao's three-day official
visit to India

30. Benefits of India Trade:
ASEAN moving towards Asia Union and Monetary Fund
Objectives of the Union:
Asian Monetary Union; modeled
after the European Union
• Greater regional integration
• An Asian regional economic
entity
• A greater Asian free trade
area.
India benefits = Trade
standardization among ASEAN
countries

31. India’s Trade with ASEAN Member countries
• August 2009.
- India and the ASEAN
signed Trade in Goods
Agreement under the
broader framework of
Comprehensive Economic
Cooperation Agreement.
Total trade with ASEAN members
2008-09 USD $489 b
2009-10 USD $466b
2010-11 USD $267b
Source: India Ministry of commerce
and Industry

32. Geopolitics in Asia: Russia, India and Pakistan-China
Cooperation
Military-technical cooperation (MTC) of
Islamabad and Beijing is carried out in three
main areas:
Rockets:
• Pakistani armed forces have short range
+ medium range missiles: ‘modification
of Chinese ballistic missiles’;
Combat aircraft:
• Pakistani Air Force has aircraft of
Chinese design – JF-17 Thunder and K-8
Karakorum,
• co-produced interceptor aircraft + early
warning radar system made in China.
Nuclear program:
• it is believed that China could have
transferred the technologies that are
critical to the production of nuclear
weapons to Pakistan.

33. Consequences: Tensions: Asia's space race
• Tensions in Asian politics underlie
today's space competition.
• Long-festering historical and
geopolitical feuds have created
hostilities
• Asian officials believe that space
programmes will bring them status at
home and abroad.
• Asian nations do not want to be seen
as 'backward' or, worse, as falling
behind their neighbours in science and
technology

34. India - Europe & Middle East
Colleen Litkenhaus, Horochi Ogan, Phil Njowusi, Hugues Regal, Bipin Kumar

36. After the WW2

37. The Soviet Period
• In 1955, Khrushchev announced that the Soviet Union supported
Indian sovereignty over the disputed territory of the Kashmir region
and over Portuguese coastal enclaves.
• The Soviet relationship with India rankled the Chinese and
contributed to Sino-Soviet enmity during the Khrushchev period.
• The Soviet Union declared its neutrality during the 1959 border
dispute and the Indo-China war of 1962, although the Chinese
strongly objected.
• Until the late 80s, to counter these efforts by India to diversify its
relations, the Soviet Union proffered additional weaponry and
economic assistance.

38. The Russian Period
• After the USSR collapse, Russia has continued to support
technologically and economically India.
• Between 1995 (Indian economy liberalization) and 2005, economic
relation between Russia and India was frozen, India criticizing
Russia about the poor quality of equipment delivered and the
exorbitant cost of their maintenance.
• But cooperation on strategic domain like civil nuclear, space
launcher or energy was never stopped.
• Now, a new age of sciences and technologic cooperation is
open, supported by ambitious project as the 5th generation of
multi-missions combat aircraft.

39. Reduce distance, increase trades
North-South Transport Corridor

40. EU-India FTA still negotiated
Commission president Jose Manuel Barroso
EU president Herman Van Rompuy
Indian prime minister Manmohan Singh
New Delhi – February 2012

41. but a FTA strongly contested.
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42. India & Europe

43. India - Africa
Colleen Litkenhaus, Horochi Ogan, Phil Njowusi, Hugues Regal, Bipin Kumar

44. Overview
• India-Africa partnership rests on three pillars of
– capacity building and skill transfer,
– trade and
– infrastructure development
• The impact of India’s globalization efforts in Africa
– Access to commodities and natural resources,
– Access to land and
– Support

45. Indian diaspora in Africa
• Indians have been in
South Africa 1,160,000
Africa since the 10th Kenya 230,000
century Tanzania 90,000
Uganda 90,000

46. India – Africa
Political
Colonialism and liberation wars
– stronger political relations
Cold War
– African countries joined the non-aligned
movement pioneered by India, Egypt, and
Former Yugoslavia.
Current
- UN Security Council Seat
Seeking support from SA
– The India-Africa Forum Summit in New
Delhi, April 8, 2008
• India for the first time, constitutes the basic
framework for the relations under the South-
South Cooperation platform.

47. India – Africa
Business
• India-Africa bilateral trade $60 billion in
2011.
• India and Africa revise trade target to
$90 billion by 2015
• Over 250 Indian companies have
invested in Africa, mainly in
telecommunications and chemical and
mining companies.
• In June 2008, Bharti Airtel, and Indian
telecommunications giant, purchased
Zain Africa for US$9 billion.
• India-Africa Trade Ministers meeting in
New Delhi on March 17, 2012

48. India – Africa
Military
•Military cooperation, trading arms
and joint exercises
•Pirates in Indian Ocean
–India is spearheading an effort to
create a naval standard operating
procedure (SOP)
–Indian Ocean Naval Symposium (IONS)
took place in South Africa 2012

49. India – Africa
Energy
• Seeks to diversify oil supply
– 4th largest consumer
– Largest consumer in 15 years
– Hopes to import from Africa
(Nigeria, Sudan, Angola)
• Largest purchaser of coal from South Africa
– In 2010, India imported 1.4 million tonnes

50. India Investing In Africa
• India-Africa Business Council
• $5 billion line of credit for 3 years
• $300 million for Ethio-Djibouti rail line
• $700 million for new institutions, training
programs
• India-Africa virtual university 10,000 new
scholarships
• More than 22,000 scholarships to African
students
• $2 million for African Union mission in Somalia
• India-Africa food processing and textiles clusters

51. India-Nigeria
• Trade between India and Nigeria had hit
$14.628 billion per annum as at August
2011, more than any other African country
• India is also Nigeria’s biggest trading partner.
• India, with an investment of $5 billion in the
country, was the largest foreign direct investor
in Nigeria in 2010
• India has committed a $100 million line of
credit to Nigeria for improvement in its power
sector

52. India – South Africa
• Gandhi
– Began his political/legal career
– Civil disobedience 1890s and
1900s
– Improved lives of Indians living in
South Africa

53. India – South Africa
• Apartheid – era
– The Indian government was an
outspoken critic
– Refused to maintain diplomatic
relations
– Evoked goodwill in South Africa
and other African countries.

54. India – South Africa
• The bilateral relations began after
apartheid in 1994
• BRICS – 2011
– IBSA
• SACU – India Preferential Trade
Agreement (PTA) Negotiations are in
process, includes South
Africa, Botswana, Lesotho, Namibia and
Swaziland
• Gold bullion constitutes one-third of
India's imports from South Africa
• India polishes and processes diamonds
from South African mines.

55. India – South Africa
• India awards South African Nelson
Mandela - Mahatma Gandhi Peace
Prize

56. India – South Africa/Sports
• Cricket
– Indian National Cricket Team
– South African National Cricket
Team
– Frequent exchanges and
tournaments
– Many South African players in
Indian Premier League
– They are very popular.

57. India - The Americas
Colleen Litkenhaus, Horochi Ogan, Phil Njowusi, Hugues Regal, Bipin Kumar

58. India and the Americas

59. India - US

60. US – India Strategic Dialogue
• Economics and Trade
• Education
• Science and Technology
• Clean energy
• Health
• Security

61. India - US
• US-India Civil Nuclear Agreement
• UN
– active member
– Seeks permanent Security Council Seat
– holds a non-permanent 2011-2012
• Indian Navy most capable in region
• Indian Air Force is 4th largest

62. India in America
• Luce-Celler Act of 1946
• 3.1 million people; 1%
• 69% growth rate
• 2nd largest diaspora
• 26% start-ups in Silicon Valley

63. U.S. – India Business Council
• Trade and Investment Initiative
– US-India BIT (Q4 2013)
– New potential disadvantages
(Japan, ASEAN, Australia, New Zealand, South
Korea, EU, Canada, etc)
• Coalition for a Healthy India
– raising the standard of care
– developing new treatments and cures
– ensuring access and affordability
– getting medicine to patients
– corporate social responsibility
• USIBC Education Initiative
– Higher Education (additional facilities)
– Elementary K-12 (replication)
– Vocational Training and Skills Development
(human capacity building)

64. India - US
• 3rd largest trading partner
– 13th largest trading partner of US
• Goods and Services trade with
India totaled $86b in 2011
• U.S. goods and services trade
deficit with India $20b in 2011

65. India - US
• Principal U.S. exports: From US
To India Precious stones &
– diagnostic or lab reagents metals
5%5% Machinery
– aircraft and parts 6% 24%
–
11% Mineral Fuel
advanced machinery
– cotton 13% 23% Optical instruments
& equipment
13%
– fertilizers, ferrous waste/scrap metal Electrical machinery
– computer hardware
• Major U.S. imports: From India
to US Textiles
– textiles and ready-made garments
6% Precious stones and
– Internet-enabled services 8%
8% 24% metals
– agricultural and related products 8%
Pharma
– gems and jewelry 11% 22% Mineral Fuel, Oil
– leather products 13%
Lac, Gums, Resins
– chemicals

66. Best Prospects for US Entrants
• Architecture, Construction and Engineering Services
• Civil Aviation
• Education Services
• Environment and Water
• Healthcare and Medical Equipment
• Infrastructure (Roads, Ports and Railways)
• Mining and Mining Equipment
• Plastics
• Power and Renewable Energy
• Travel and Tourism

67. Investing in India
• US is India’s largest investment partner – 13%
• India attracted USD 19.42b in ‘10-’11
• Expected FDI to surpass $40b in Indian ‘11-’12
• U.S. investment in India is led by the
information, professional, scientific, technical
services, manufacturing
• New FDI
– engineering firms pursuing huge infrastructure projects
• Delhi-Mumbai Industrial Corridor
• Chennai-Bangalore highway project.
• Foreign investment being sought:
– power generation, telecommunications, ports, roads,
– petroleum exploration/processing, and mining
• FDI rules have been liberalized over time, but many
restrictions remain, especially in services.

68. Investing in America
• $4.4 billion in 2009
• $3.3 billion in 2010
• $4.4 billion in 2011
• Primarily concentrated in the
professional, scientific, and
technical services sector
• Contributed to creation and
retention of more than 30k
good American jobs

69. Investing in America
• The Essar Group: $1.6 billion in the declining Minnesota Steel
Industries now employs 7,200 jobs
• The Tata Group: more than $3 billion and 19,000 jobs
• Jubliant Organsys: $246 million and 900 jobs
• Wockhardt: a pharmaceutical company, acquired Morton
Grove for $37 million preserving 200 jobs
• Crompton Greaves: $20 million to launch a Center for
Intelligent Power with University of Albany 100 high-tech jobs

70. India and Canada
– Shared history; Second in immigration
– Leaders set CDN $15 billion trade
target by 2015
– $2.6b exports to India
– $2.5b imports to Canada
– $4,396million FDI to Canada
– $587 million FDI to India

71. India and Mexico
• 10-year bilateral investment promotion
and protection agreement (BIPPA)
• $2.8b two way trade 2010
• Exports from India: transportation
equipment, pharmaceuticals, ready made
garments, inorganic/organic/agro
chemicals, etc
• Imports to India: electronic goods, metal
scrap, iron and steel, plastic material, etc.

72. India and Brazil
• BRIC
• $9.28 billion two way trade in
2011
• India’s exports $6.08 billion
• India’s imports $3.2 billion
• Focused on LAC
• Agreement with MERCOSUR
(Brazil, Argentina, Uruguay and
Paraguay)
• China

73. Conclusions
Colleen Litkenhaus, Horochi Ogan, Phil Njowusi, Hugues Regal, Bipin Kumar

74. Challenges of globalization
• Uneven distribution of benefits to the different
sections of the society.
• Its role in creating greater social stratification
and inequality; widening the gaps between the
“haves” and “have not’s”
• Its role in destabilizing and distorting indigenous
culture, tradition and values.
• Its role in alienating the youth from their own
place by uprooting them and at the same time
not sure of providing them a landing space.
• Its role in facilitating the rich to grow richer by
drawing the resources from the poor.

75. Costs and benefits of the spread of trade, investment, and
technology for each Team’s region? Who are the winners and
losers?
Costs Winners
• Butterfly effect • Gen X,Y & youth
• Keep up with competition.
• Critical view from a global perspective • Indian consumer
• Loss of cultural purity • Indian companies
• Can undermine the sovereignty of the • Certain industries- Services, Handicrafts
nation state
sector, Rural artisans
Benefits
People
Losers
• More access to information and knowledge & • Not all-inclusive globalization
advances in technology
• Segments of the under-served
• Acquisition by Indian companies
– Tata-Corus/Tata JLR/Infosys/Wipro
• Certain industries – Manufacturing, mining
• Availability of overseas funds • Uncompetitive public sector - Loss of jobs
– Silicon Valley Bank and VC's in Bangalore to more competitive/private industries

76. implications for governments, businesses, and the
corporate social responsibility community?
• Improve the business climate
• Managing a leveled playing field in a global economy
• Implement frameworks for better education, healthcare and social security
• Regulate and fair ensure implementation of subsidies
• Eliminate all forms of & discrimination – racial, caste, gender, sex
• Environmental conservation
• Enforce fair labor standards and human rights
• More open and transparent tax laws

77. Consequences from the spread of trade, investment, and
technology in your region/countries that are of particular
salience?
• Higher GEMBA Fees! (thanks to currency fluctuation)
• Better access to education
• Fewer poor people, net net
• Better access to healthcare and social security
• Increased consumer aspirations
• Indian MNC’s

79. Back up Slides
Colleen Litkenhaus, Horochi Ogan, Phil Njowusi, Hugues Regal, Bipin Kumar

80. Future
• Can we estimate the
future?
• Trajectories
• Econometric forecasting
models
• Psychohistory

81. Biases in Estimation
• The political
economy of IMF
forecasts

82. Factors in India’s favour
• Population (1.25 billion)
• Youth (Young country in an ageing
world)
– by 2020, the average age of an Indian
will be 29 years, compared to 37 for
China and 48 for Japan
– There will be 700 million youth (40%
of them skilled)
• Democracy
• Diaspora
• UIDAI (Unique Identity Authority of
India)
• Infrastructure spending
– India’s need to raise US$ 1 trillion for
infrastructure spending by 2013

83. Trade

84. India Market Overview
• 3rd largest Asian economy
• 2nd economic growth (1991)
• GDP $1.83 trillion; growth rate of 6.9% 2012
– Since ’97; reducing poverty 10%
• 2nd most populous country
– 15% of world’s population
– 30% of the country’s 1.2 billion inhabitants reside in urban
– Median age is 25, one of the youngest among large economies
– by 2020, the average age of an Indian will be 29
years, compared to 37 for China and 48 for Japan

85. India Market Overview
• India's industrialized economy encompasses:
– Manufacturing sectors:
Steel, Oil/Gas, Auto, Plastics, Textiles, Villa
ge/modern farming and handicrafts
– Services: IT; 50% of output with 1/3 labor
• Seeking public-private to advance large
infrastructure projects
• Attempting to diversify trade beyond Europe
and the United States to ASEAN, Latin
America, and Africa.

86. India Market Overview
• Good news
– Relatively stable political environment
– Growing middle class (customers!)
– Growing services exports and domestic
– consumption
• Challenges
– worldwide economic slowdown
• US uncertainty; EU debt crisis
– decreasing international financing
– anti-inflationary measures by Reserve Bank of India 2011
– Infrastructure (roads, education, ports, telecom, railroads)
• $1 trillion towards infrastructure 12th Five-Year Plan (2012-2017)

87. 1. Globalization - Past
Globalization – Phase I
Latter: 16th century sea trade routes - Spice

88. 2. India
Global crude oil effect on India
• International crude oil price has
declined by 20% since the beginning
of the last fiscal year
• The price of domestic fuel has gone
up cause the depreciation in Indian
currency against USD

89. Doing Business in India
• Trade Policy Trends
– policies that either ban certain
imported products or require
some domestic sourcing
– mandate a certain percentage of domestic content
for government contracts

90. India in Asia: …..the rise of India
• Pre- 1990s:
-Self-reliance, strong restrictions
on FDI and licensing of foreign
technology.
-Inward-oriented nationalistic
policy through 1980s
• Post 1990s:
-Trade liberalization and opened
up FDI (IMF conditions)
-Tapped into global knowledge
through trade,
• Growth through strength of it’s IT-
enabled service export sector

91. India in Asia: …..the rise of India
• Pre- 1990s:
-Self-reliance, strong restrictions
on FDI and licensing of foreign
technology.
-Inward-oriented nationalistic
policy through 1980s
• Post 1990s:
-Trade liberalization and opened
up FDI (IMF conditions)
-Tapped into global knowledge
through trade,
• Growth through strength of it’s IT-
enabled service export sector

92. India-ASEAN trade
Total Trade
2009 $41.1b
2010 50.1b
• To reduce India's trade
deficit.
• Expected to reach $70b
in 3 years
Source: Ministry of Commerce
and Industry Joint Secretary
Sumanta Chaudhuri

93. TRADE TALKS
•The trade meeting is to be attended by 15
African leaders. On its fringes was an India show
comprising business seminars, cultural projects
and a trade exhibition.

94. AIDS
•India's wooing of Africa includes
aid, technology and education, such as a
new centre in Uganda to train businesses
about global markets.

95. AIDS
• A diamond processing facility in Botswana,
• And assistance to cotton farmers in four of
the continent's poorest countries. Democratic
Republic Of Congo, Zimbabwe, Liberia and
Burundi.