Globalization of Markets

In simple terms, globalization is the economic, cultural and traditional share and communication between various countries across the world. It is a continuous socio economic process which is a major step towards the development of the country. Through the process of globalization, there is intermingling and blend of various cultures, traditions and thoughts and interchange of ideas. Another major aspect of globalization is the business and trade links between various countries across the globe. This fact has probably given rise to the globalization of markets.

Globalization and market changes in India

Globalization has been a major factor behind the improvement of the market changes in India. Prior to the liberalization of the market in the country, India suffered a huge market set back and it led to problems in the balance of payment accounts. The first wake of globalization was felt in the country in the 1990s when the government initiated the open market and economic liberalization plan. This led to huge improvement in the market scenario of the country which significantly changed from the state controlled market to the consumer market. Due to the emergence of the consumer market, there was an increase in demand and supply. The positive change in the market pattern led to the improvement in the standard of living in the country.

Today, India is one of the largest growing economies in the world and ranks as the 4th largest in terms of the purchasing power parity (PPP). In terms of the market exchange, it ranks as the 12th largest economy in the world. The country has also enjoyed a significant growth in the Gross Domestic Product (GDP) due to the improvement in the market and the increase in exports. The annual rate of economic growth ranges between 6 and 7%. The growth rate of the country was around 6.7 % in the financial year 2008-09. In the recent budget, the government has taken more steps to ensure high economic growth up to around 9%. Renowned financial organizations like the World Bank has also expected much optimism that the growth rate of India may even surpass China. It has projected that the growth rate will be around 8% in the year 2010.

Improvement of various sectors

Globalization of markets has also cast a favorable effect on various sectors in India. According to recent surveys, the industrial sector in the country has significantly grown at a rate of around 6.8%. This rate is expected to be more in the years to come. Due to the development in technologies and innovation, the exports in the industrial sector has also grown to a great extent and today the country ranks as a great market in the Asia-Pacific region. The industrial sector has a share of around 29% of the total GDP. The agriculture sector has also done significantly well over the few years and contributes around 17%. The manufacturing segment has also experienced a phenomenal growth from 8.98% to 12%. The same is the case with the communication and storage sectors which have enjoyed a growth of 16.64%. Globalization has also given a boost to the equity market of India which is now the third largest in South East Asia after China and Hong Kong.

Globalization and increase in foreign market

Due to globalization, India has turned into a vast consumer market with high demands. This has led to the growth of foreign investment in the country. More and more foreign companies and global giants have started entering the Indian market to cater to the high customer base and high demand. Today, the amount of foreign institutional investments (FIIs) has gone up to around US$ 10 billion. This is a very big factor behind the growth of the stock market and the overall market conditions. In case of the foreign direct investments (FDI), there has a large increase of around 85.1% over a period of few years. Recent surveys have shown that the amount of foreign direct investments had grown from US$ 25.1 billion in 2007 to around US$ 46.5 billion in 2008.

Corporate Globalization

Last Updated on 5/18/2011