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Explain the good and bad effects of globalisation in Indian industry.

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Globalisation is the interconnection between counties through the expansion of foreign trade and foreign investment. It is the process of integrating the home country with the foreign countries through the movement of goods, services, investment, technology and people. India has been a globalised economy since 1991 after the country faced an economic crisis in the pre-1991 period. After this 27 years of globalisation, the economy has experienced both ups and downs because of this increased integration of the country with other countries.

Some of the advantages that are the result of globalisation are:

• Production of standardised, high quality products and services: Globalisation has resulted in greater competition among the producers. Producers in the home countries compete with the foreign producers and products thus improving the quality of the goods and services produced. This greater competition has resulted in the improved standards of the products produced at a lower price. This increased quality of products at lower prices has raised their standard of living significantly.

• Improved choice for buyers: MNCs are investing immensely in sectors like automobiles, communications and others industries. This has improved the choices of buyers. Consumers also have the choice to select commodities produced beyond the domestic markets through international trade.

• Increased employment opportunities: Globalisation always brings in bulk of employment opportunities. MNCs will require qualified and professional employees for the management of their regional offices. It will also increase employment in allied sectors like transportation, IT and other industries. They will also generate a lot of other jobs in sectors like footwear and garments when they place orders for the products with the local industries. This increases the employment opportunities for both skilled and unskilled labour.

• Additional investment: Globalisation beneficial as the huge MNCs with many resources will bring in their additional share of investment. This is particularly beneficial to the local firms in a developing country like India that has scarcity in resources. This will increase the quantity of resources available to the local firms to expand their production.

Just like a coin, globalisation has also its other side. Even though the economy has highly benefitted through globalisation, it has also resulted in many issues. The extreme integration of the economy and the pressure of competition has posed many challenges. Some of them are:

• Challenges to small traders: Because of the growing competition through globalisation from the MNCs, small companies who are unable to withstand the increased competition are shutting down their companies. The unchecked imports of the goods without any restrictions and the aggressive advertising strategies taken by the MNCs has resulted in the closure of many small, domestic industries leading to large unemployment. The import of cheap, highly advertised commodities has created brand domination in many sectors. This has rendered many workers unemployed. Batteries, plastics, toys, tyres and foodstuff are some industries where the small manufacturers are worst hit.

• Uncertainty in jobs: Government is providing many incentives for the MNCs to attract foreign companies. In the organised sector, the rights of the workers are protected. But MNCs are allowed to overlook many of these rules. One such incentive provided to the MNCs is flexibility in labour laws. According to this, the companies are allowed to hire workers for short periods of time when the pressure of work is more, rather than hiring them on regular basis. This results in uncertainty in jobs.

• Unemployment: Globalisation has resulted in jobless growth. The employment opportunity created through globalisation is not sufficient enough to absorb the entire Indian workforce. On the top, the technology revolution brought about by globalisation has rendered many unemployed. Many jobs earlier performed by human labour is now replaced by machines. The replacement of human labour by machines has increased the unemployment level in the economy.

It can never be said that globalisation should be totally evaded in the economy. But government and other authorities should ensure a fair scheme in which the benefits of the globalisation reaches everyone. This equity is yet to be achieved.

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