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Globalization is an old phenomenon. It is a changing process. It makes the world better. It helps us know what is happening around the world. It helps in the exchange of ideas, goods, services, and culture between different countries in the world.

What is Globalization?

In this modern world, no country can survive independently, so they have to depend on other countries for their survival. This interdependence of one country on other countries is called globalization.

In other words, we can say that the interconnectedness of people, culture, economy, and food of one country with another is called globalization. The three important components that spread globalization are:

  1. Internet
  2. Telecommunications 
  3. Transportation 

In the words of Kofi Anan, “arguing against globalization is like arguing against the law of gravity”.

Features of Globalization:

  1. In globalization, countries can trade freely with other countries without any restrictions.
  2. Another important feature of globalization is liberalization, in which entrepreneurs can set up their industries within and outside their country.
  3. In globalization, there are import and export policies.
  4. One of the features of globalization is the interconnectivity of people among different countries.
  5. Privatization is also an important part or component of globalization.

Types of Globalization

  1. Economic Globalization: This type includes multinational corporations and NGOs that have a great impact on international markets, such as the World Bank and International Monetary Fund.

  2. Political globalization: It means the establishment of institutions by the governments of different countries at the world level. Political globalization helps increase coordination and solve conflicts between different countries. The various examples are the United Nations, QUAD, the World Health Organization, the World Trade Organization, etc.

  3. Ecological Globalization: In ecological globalization, countries consider the planet a single global entity. All countries need to protect it, as any change in it will affect everyone. For example, UNFCCC, etc.

  4. Financial Globalization: It is linked to international financial exchange or monetary exchange. Stock markets are a great example of it. In 2008, when the stock market in the US collapsed, the whole world economy faced an economic depression.

  5. Cultural Globalization: Culture includes food, clothes, customers, rituals, festivals, language, and values. In cultural globalization, the culture of one country largely affects the culture of other countries. It can be understood with the help of Indian examples:
  • Hollywood music has replaced Bollywood music. Now the Indians want to hear English songs and songs by Korean bands such as BTS and Blackpink.
  • Other countries are adopting Indian meditation practices. International Yoga Day is celebrated worldwide on June 21.

6. Geographical Globalization: Transportation becomes so cheap that it leads to the constant movement of people from one part of the country to another without any restriction. Some countries offer visas on arrival.

Globalization and the Indian Economy

The concept of globalization in India was introduced in 1991, when India adopted a new economic policy of LPG.

In order to develop the economy, India took various measures, such as the removal of trade barriers, the promotion of free trade, and the establishment of special economic zones.

  1. Financial sector: This sector includes banks, real estate, the stock market, and insurance.
  2. Automobile sector: The Indian automobile sector has grown by 72% after globalization. The Indian automobile companies like TATA and Mahindra have contributed a lot to the economy. On the contrary, China’s automobile industry has grown by 149%.

Examples of Globalization

  1. Popular fast food chains have branches around the world, such as Tim Horton’s, KFC, McDonald’s, Domino’s, Starbucks, Barista, etc.
  2. Multinational companies like Amazon, Flipkart, Zara, Apple, and Samsung have stores in various countries.
  3. The IT companies are providing their services in different countries, like Google, IBM, Tata Consultancy, Accenture, etc.
  4. Various banks in different countries have branches in other countries. Some major banks are: Citibank, SBI, HSBC, JP Morgan, etc.

Advantages or Pros of Globalization:

  1. Employment generation:
    With the arrival of new companies in less developed countries where labor is cheap, both skilled and unskilled labor got employment. As a result, their income increases.
  2. No negative import substitution: It will improve terms of trade as there is no need to produce goods whose production is expensive. This point can be understood with the help of an Indian example. When there is no globalization, India will produce oil in its own country, which is very expensive, but with the help of it, India can import oil from Gulf countries at cheaper rates. So it can solve the problem of uneconomic import substitution.
  3. Balance of payments: One country can export various goods to another country and earn foreign reserves. As a result, the balance of payments can become positive. A positive balance of payments means the export of goods and services is greater than the import of goods and services.
  4. Technological advancements: The developed countries can share their know-how in technology with less developed and developing countries. This will help the poor countries to develop.
  5. Restriction on Monopoly: Another benefit is for consumers, as they will have a variety of goods and services to choose. It put restrictions on the monopoly and concentration of power and money in the hands of a few people.
  6. High standard of living: The purchasing behavior of people has changed. They want branded clothes and have started using more digital equipment.
  7. Increase in competition: In a globalized market, because of the competition from foreign companies, domestic industries become more conscious and will provide quality products at a lower price.
  8. Free Trade Agreements: Many countries form their own agreements with other countries to promote free trade among them, such as the Korus, South Korea and US free trade agreements. NAFTA North Atlantic Free Trade Agreement.

Disadvantages or Cons of Globalization

  1. Economic inequality: In a globalized world, there is an increase in economic inequality. It will lead to a wider gap between the rich and poor sections of the country.
  2. Loss to small-scale industries: with the arrival of multinational companies, small-scale industries cannot compete with these big MNCs in terms of quality and price. So these indigenous industries shut down after some time.
  3. Brain drain: Skilled workers like doctors, engineers, and scientists from less developed countries are migrating to more developed countries in search of job opportunities. It leads to brain drain.
  4. Increase the risk of pandemics: Because of it, travel has increased. The risk of spreading pandemics like COVID, AIDS, and H1N1 is also increasing.
  5. Redistribution of power: It paves the way for the redistribution of economic power at the world level, leading to the dominance of economically powerful nations over poor nations.

In short, it has both pros and cons. It is the duty of the country to balance national interests with international trade and competition.

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