Country Analysis Essay Example | Topics and Well Written Essays - 1000 words

Country Analysis - Essay Example Some scholars argue that the process of globalization is beneficial for a country’s economy because it is based on the principle of free trade and thus increases the overall competition levels and consequent efficiency of the world’s markets. However, in the specific case of India, scholars have elaborated on how the process of globalization has in fact had negative effects on the country’s economy. Since partition in 1947, India’s trade and industrialization policies have varied; up until 1961 the trade policies were quite â€Å"liberal†, from this point onwards and up till 1977 the government of India geared its trade agenda to prioritize domestic industry, 1978 onwards they were again aligned towards liberalization and finally in 1991, after a severe financial crisis India opened its doors to free trade and globalization. To aid the process, IMF and World Bank provided the Indian economy with loans. The country strove to meet its import demands w hile simultaneously removing import duties in stable phases. In 1995, India formally joined the World Trade Organization. 2004 was a precipice for the Indian economy and saw privatization of several public sectors companies, the crash of their stock exchange and the slowdown and in some places the reversal of the globalization process for the Indian economy. The time period from 1991-2004 was the time in which India experienced the highest levels of foreign direct investments yet. India also received aid from several countries all over the world; to name a few, the UK provided grants aimed towards developing the education sector and alleviating poverty, Japan provided loans and grants aimed at the development of power industry, railways, telecommunication and poverty alleviation and Denmark gave India grants and loans for private sector businesses related to imports. There were also some measures taken by GATT and WTO on India’s account geared towards solving India’s b alance of payment problems, increasing the economy’s productivity and global competitiveness and local equity management. Foreign direct investment in India peaked by 1961 and had increased up to 90% by 1990. From 1991 onwards FDI kept increasing as India was now open to free trade and liberalization policies. Globalization also affected the export levels and levels of outsourcing from India; the export basket was made up of mostly law value goods like textiles, handicrafts and garments. The levels of outsourcing however, were phenomenal; India had strong footing in the supply of cheap labor, thin margins and competitive markets. In recent years, outsourcing in India has expanded to involve the technology sector and other backend services sectors. Simultaneously, the outward foreign direct investment from India has also expanded which shows that India’s competitiveness and productivity in the global market has also increased however, improvement is still required as In dia’s outward FDI consists mainly of basic and commodity products and has not yet reached the efficiency levels required of global standards. Nayar (2006), talks about how globalization in India has had an impact on three important elements, namely the flow of goods and services, the flow of capital and the migration of people. This paper