History of Globalization

The history of globalization is probably as old as the history of human civilization. The history of globalization can be traced back to the Harappan civilization era. During that period, farming was the main lively hood and these farmers mainly grew wheat, rice, and cotton. The people in coastal region of India produced salt. These farmers of India had transnational business relations with West Asian countries and the most prominent of them being Iraq (then Mesopotamia). They traded articles like gold, silver, metals, potteries, gems, cotton, silk, food grains, honey, and spices like cinnamon and pepper. The history of globalization also suggests that the economy of ancient India had a strong cross border trade and commerce relation with China and they mainly traded food grains, spices, cottons, gold, silver, and metals. Further, a more organized form of trans-world trade has been in force from the mid of 14th century and it started as a means to explore new business destination and opportunities. Furthermore, Chandragupta Maurya who reigned during the period 325 BC popularized expansive trade and economy.

Alexander the Great forges eastward link with Chandragupta Maurya for overland routes between the Mediterranean, Persia, India, and Central Asia. During the 1st century CE the trans-world trade makes its first major appearance in China under the Han dynasty and successfully established trade relations with Asian and European countries. The period from 650-850 AD records the expansion of Islam and trade relations with the west Mediterranean region with the Indian sub-continent. The Rise of Genghis Khan during 1100 AD gave rise to the integration of overland routes across Eurasia. The 1650s marks the expansion of the slave trade and it sustained the expansion of Atlantic Economy, giving birth to integrated economic and industrial systems across the Ocean. The period from 1776 to 1789 AD marks the US and French Revolutions and the creation of modern state as a fall-out of military and business interests. These integrated empires expand during the industrial revolution. The eighteenth century marks the merging of the modernity with globalization and it also marks the foundation for the creation of international trade law.

The modern day Indian economy (1900) had taken cue from the history of globalization and structured its foreign trade policy accordingly. The liberalized economic policy adapted and implemented by the Government of India, finds its root back to the rich history of globalization.

The latest effects of globalization with respect to Indian markets are as follows -

Industrial Growth - for the first time has exceeded 10%. Manufacturing growth rate has exceeded 12 % in 6 months (April-September 2006). The mining and quarrying sector has registered a growth of 4%. The electricity sector recorded a double-digit growth of 12% during September 2006 as compared to September 2005. Consumer durables and non-durables have also recorded upswings. The use-base economic sub-groups, intermediate goods have registered an impressive growth of almost 15% during September 2006 over September 2005. Consumer goods have recorded a high growth of 13%. The National Manufacturing Competitiveness Council has targeted 12 to 14% growth in the 11th Plan period
Foreign Institutional Investors (FIIs) - net investments in equities crossed US$ 7 billion in calendar 2006. FII net investment till 6 November 2006 has been US$ 7.08 billion, according to the Securities and Exchange Board of India. 151 new FIIs have opened their offices in India during first 10 months of 2006. The total number of FIIs in India stands at 974 as on November 2006
Foreign Direct Investment (FDI) - India envisage of attracting $10 billion of foreign direct investment (FDI) this year as inflows have nearly doubled to US$ 4.4 billion in April-September 2006. In September 2006, FDI inflows grew 225% to US$ 916 million as compared to US$ 282 million in the same month last year. Services attracted maximum investment of US$ 1.5 billion recording growth of 350%. Telecommunication sector with inflows of US$ 405 million has registered the maximum growth of 950%. Corporate India has recorded its highest rise in salaries at 22% in the first half of 2006-07 against increase of 17% in 2005-06
India's Balance of Payments - is expected to remain comfortable
Merchandise Exports - recorded strong growth
The Invisibles Account - remained positive during last financial year and financed 2/3 of the trade deficit
India's Foreign Exchange Reserves - were US$ 166.2 billion as on October 2006, showing increment of US$ 14.5 billion over end-March 2006
India's economy grew at 9.3% in quarter April-June and it was driven by manufacturing, construction and services sector and agriculture sector
GDP factor for the first quarter of 2007-08 was at Rs 7,23,132 crore, registering a growth rate of 9.3% over the corresponding quarter of previous year
Manufacturing industry registered 11.9% growth
The passenger vehicles sector grew by 11.61% during April-May 2007
Electricity, gas & water supply performed well and recorded an impressive growth rate of 8.3%
Construction growth rate rose to 10.7%
Trade, hotels, transport and communication registered a growth rate of 12%
Financing, insurance, real estate and business services recorded an impressive growth rate of at 11% during the 1st quarter of this fiscal
Community, social and personal services maintained a decent growth rate of 7.6%
The growth rate of agriculture, forestry & fishing' and 'mining & quarrying' are estimated at 3.8 per cent, and 3.2 %, respectively during the 1st quarter of 2007-2008
Exports grew by 18.11% during the 1st quarter of 2007-2008 and the imports shoot up by 34.30% during the same period
India's FOREX reserves (excluding Gold and SDRs) stood at $219.75 billion at the end of July ' 07
The food sector is estimated to be of US$ 200 billion and it is expected to grow to $310 billion by 2015
Stocks of food-grains grew by 13.1% to 17.73 million tons
The annual inflation rate was 4.45% for the week ended July 28, 2007
India's Balance of Payments is expected to remain comfortable
Merchandise Exports recorded strong growth