The Negative Effects of Globalization in India

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  Over the past few decades, technological advancement has directed us to easier and reliable communication and interaction among countries. It has also contributed in the growth of financial and cultural exchanges across national boundaries. Globalization has helped to develop many countries, including India by creating economic interdependence among them. Indeed, globalization has proven favourable to India and hence has improved the country’s economic development. This reflection paper we will look at how globalization has profited India financially and will address the issues of work, social mobility, and education.

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Globalization in India came into limelight with the announcement of the devaluation of Indian currency by 18-19 percent against key currencies in the international foreign exchange market. In fact, this measure was taken in order to resolve the BOP (Balance of Payment) crisis.

“Globalization is the process of international integration arising from the interchange of world views, products, ideas, and other aspects of culture.” (SocioCosmo, 2013). Put in simple terms, globalization refers to processes that increase world-wide exchanges of national and cultural resources. Advances in transportation and telecommunications infrastructure, including the rise of the telegraph and its posterity the Internet, are major factors in globalization, generating further interdependence of economic and cultural activities.

It is not only updating but also has westernized the innate cultures. That is probably where we need to track the process and not let progress go wild. There has been noteworthy de-localization that needs more people to be more lenient since face-to-face interaction is no longer the order of the day. It so happens that an American is trying to figure out his billing issue of his mobile phone with the help of an Indian call centre employee who is not the direct employee of the service provider. Now that sounds intricate and must be distributed carefully.

Cross country merger has several aspects and can be political, cultural, social and/or fiscal, all which equal globalization. Nevertheless, financial incorporation is the most common aspects. Economic integration involves evolving a nation's economy into an international economy. After World War I and II the early trends of globalization diminished throughout the world due to many barricades which limited the movement of goods and services. In fact, cultural and social incorporation are even more important than economic integration. Globalization increases competitiveness at company level and national level, which leads company management and governments to come up with new strategies designed to increase labour efficiency with reference to increase throughput, quality and innovation.

As the sceptics may say, everything story has multiple directions. Globalization gains can be analysed in three channels. The first way is in the form of trade of services and goods. Secondly by movement of capital, this permits savings of the total world to be circulated among nations which has the potential to invest high. Through foreign capital investments many country’s economies have grown as it creates more odds of employment and shows the country’s production development capacity. The last concept is the financial flows. It is a known fact that when one country faces a crisis then it also affects other countries as well, this is somewhat natural. Through capital flow and foreign exchange, market resources are shifted which increases the turnover in the markets which are essential to the international capital flow. Although this is great for a country like India it can have some downsides as well.

Openness to foreign trade and investment is one of the main reasons for the rapid growth of India. When the government adopted the new economic model known as Liberalization, Privatization and Globalization (LPG)in the 1990s, the employment situation of India has improved significantly. According to ILO (International Labour Organization) the number of Indians in the workforce will increment by right around 80 million throughout the following decade (Financial analyst 2010) (Li, 2015). Many foreign firms are attracted to India because of the inexpensive labour cost of the country, they therefore decide to establish their business abroad and hire workers from overseas. These foreign firms need a wide variety of human labour, varying from manufacturing jobs to highly innovative positions. For example, only the sector of manufacturing jobs has contributed 16.1% of India’s GDP in the last financial year (Economist 2010). This implies that globalization reduces the unemployment rate in India by giving the opportunity to people from all social classes to earn an income and to contribute to the country’s economy. The financial situation within the country is also more equal because more people have the possibility to be employed. The relationship between international companies and Indian workers creates an economic interdependence that leads both sides to a win-win position.

The gradual increment in employability in India has led to decrement in poverty. This has also led to growth of urban middle-middle class in the country. Being in the middle-class means having income for optional spending other than essential needs. After meeting their basic needs, an increasing number of people in India can now afford to buy better consumer goods and services due to their stable revenue. In 2005, middle-represented just 5% of the total Indian population. However, the NCAER (National Council for Applied Economic Research) shows that this middle class will rise to 15% in 2015 and to over 40% in 2025 (Economist 2009). The increasing middle-class shows that people who were once poor are becoming richer and thus living a superior life compared to one’s they lived before. As the middle-class population increases, population of the poor decreases and thus the discrepancy between rich and poor is reduced.

Globalization helps Indian Entrepreneurs to know more about the competitors, recent trends, Quality of products. Helps in patenting new technology for improving their Brand Quality. These entrepreneurs are usually young, and they can make a fortune by considering low-cost solutions to all kinds of problems. Generally, people in India are more likely to have the same social status as their parents. Thus, poor families and their children’s fate could not change . However, globalization has made people realize and opened the eyes of these people. International companies brought their technologies and innovations to India, influencing young Indians to overthrow the existing social order. Globalization made these young people realize that everyone has an equal chance to become economically successful, as they want to keep up with the economically developed countries.

Globalisation floors the way for redistribution of economic power at the world level leading to domination by economically influential nations over the poor nations. Globalisation usually results in greater increase of imports than increase in exports leading to growing trade shortfall and BOP (balance of payments problem). Globalisation is proving to be a threat to agriculture in developing and underdeveloped countries of the world. As with the WTO (World Trade Organization) trading requirements, agricultural supplies market of poor and developing countries will be full of farm goods, from countries at a rate much lower than that of homegrown farm products leading to a death-blow to many farmers.

Globalization thrives to make the world a more homogeneous place. As a result, many communities were unsuccessful in preserving their old tradition, custom, and culture. Being fascinated by the culture of developed nations, many people in under-developed nations have shed their traditional dress, food, and rituals.

The environment had its own share of portion suffered greatly due to globalization. On one hand, with the increase in traffic in countries it has also polluted the tourist destinations. On the other side, the deadly gases are being released into the air by large industries have caused environmental pollution.

If we are debating about globalization and the Indian economy, then talking about the negative effects is also very important. The informal sector is purposely not listed in the labour legislation. For instance, if we consider informal workers they aren’t the subject considering the 1948 Factories Act. (toppr, n.d.) This scheme covers important factors such as common working conditions, safety, and health, the ban on child labour, working hours etc. Also, globalization has produced poor health, harmful working conditions, as well as bondage, happening in different parts of the country.

The global economy is now inter-connected. Which means that the economic collapse of one major economic nation adversely affects the entire global community.

Globalization cannot be stopped. One must admit that no country can afford to overlook the upsurge of Globalization. But, one can track its progress and keep an eye on its spread and outcomes. This was all about globalization pros and cons. Globalization makes the world better. The question is how prepared we are to face all the pros and cons of this global change. To be precise, globalization has proven beneficial to professional and skilled individuals, chiefly from urban regions. The uneducated population hasn’t gained much out of globalization.


  1. Li, E. (2015, december 15). The Benefits of Globalization on the Economy of India. Retrieved from LinkedIn:
  2. SocioCosmo. (2013, July 16). GLOBALIZATION : Good or Bad for Indian and World Economy?~SocioCosmo. Retrieved from SocioCosmo:
  3. toppr. (n.d.). Globalisation and The Indian Economy: Concepts, Definition and Effects. Retrieved from toppr:   

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