Effect of Globalisation in India

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India is one of the growing economies that has been impacted by globalization profoundly. From economy to culture and politics, India has witnessed a large-scale impact of globalization. Many analysts argue that globalization has a net positive effect on India as the Indian economy has got many new opportunities to progress due to the spread of globalization in the country. The impact of globalization can be discussed under various circumstances, but we will limit the impact on the economic sector in this article.

Effect of globalization on the Indian economy

The effect of globalization on the Indian economy can be seen in the job market, increase in consumer choices, and increased disposable spending.

  • Increase in jobs: One of the major effects of globalization, due to the presence of more foreign companies in India, there has been a steady growth in the number of new jobs created. However, most of these jobs have been created in the service sector which has crossed the previously largest GDP provider, the agricultural sector in the last few decades.

    Due to the concentration of new jobs in the service sector, people without skills or with low education levels have been left behind in the race for employment. The last decade in the employment sector is known to be associated with jobless growth as the number of jobs created newly could not match the level of economic growth of the country.

  • Increased consumer choices: Globalization has provided a greater number of choices to Indian consumers as new players in almost all fields of business have thronged the untapped Indian market. Indian consumers now have access to a large variety of goods as opposed to the economic phase before globalization when only a few options were available to Indian consumers.

  • Higher disposable income: Globalization has led to opportunities where people can earn higher incomes in cities. This has helped to modify the lifestyle of Indian employees. With an increased disposable income, the demand for foods, such as meat, egg, pulses, and organic food products has increased exponentially. This has resulted in a phenomenon popularly called protein food inflation.

    Protein food inflation is a major food inflation phenomenon where protein-rich foods are demanded more than their supply. As people’s disposable income rise, they want to consume more protein-rich foods in the form of eggs, meat, and milk. As dietary patterns change along with the rising population, the supply cannot meet the demand. This creates inflation known as protein food inflation which is a direct result of globalization.

    Indian farmers have been more interested in the cultivation of cereals and the farming of oilseeds and pulses has been neglected traditionally.

    With the service sector becoming dominant in providing GDP, the share of agriculture in the GDP has come down to about 15 percent. The World Trade Organization (WTO) has reduced support from the government to the agricultural sector, thereby reducing the influence of the agriculture sector on the economy.

    The impact of globalization has increased the vulnerability of Indian farmers. The farmers have also been more dependent on fertilizers and seeds sold by the MNCs. Globalization has some seriously detrimental effects on the agricultural sector. Due to globalization, the focus of the government has shifted from agriculture to other sectors. Moreover, whenever there is a price rise in agricultural products, the governments import the items from other countries. The subsidies offered to farmers are also increasing with the growing impacts of globalization. Traditional Indian farmers have also been threatened by genetically modified (GM) corps and herbicide-resistant corps etc.

  • Increase in healthcare costs: The interconnectedness of nations has resulted in an increase in the number of diseases. Diseases spread from one to another in greater numbers now than at any time before. International travel has led to an increase in infectious diseases.

    For example, the world has seen the global impact of the COVID 19 pandemic recently. Such occurrences of diseases increase healthcare costs and governments need to invest more in healthcare systems to meet the requirements.

    The global nature of diseases has also called for an integrated and collaborative approach among the nations and India has shown some notable efforts in containing the disease. The COVID 19 pandemic has revealed the truly global nature of pandemics and has shown that a collaborative effort is needed to contain such diseases.

  • Child labor: It is believed that child labor is also an indirect effect of the growing globalization process. Although the Indian constitution prohibits child labor, according to studies up to 115 million children in India work in detrimental conditions. In rural India, most child labor is related to agriculture while urban child laborers work in manufacturing, processing, repairs, and servicing industries. Globalization directly exploited about 300,000 children working in the hand-knot carpet industry which sells carpets worth $300 million a year.

Advantages of Globalization in India

Some advantages of globalization in India are as follows:

  • More employment opportunities.

  • Increase in per-capita income.

  • More consumer choices.

  • An untapped market resource for Indian companies worldwide.

  • An open and free market where Indian businesses can sell their products.

  • Enhanced lifestyle

  • Higher investment in India by individuals and FIIs.

  • Improvement in infrastructure.

  • The growth of technology impacting the lives of citizens.

  • Increased services sector helping Indian companies to grow.

  • The financial growth of Indian individuals and companies.

Arguments in Favor and Against Globalization


  • Globalization expands access to goods and services. People get5 more choices to make informed decisions due to globalization.

  • Globalization lifts people out of poverty.

  • Globalization enhances cultural awareness and makes people more cohesive and collaborative.

  • The spread of technology and information gains momentum due to globalization.


  • Due to globalization, employees in advanced nations can lose jobs. This happens as low-cost labor is available in less-developed countries.

  • Globalization threatens labor, environmental, and human rights.

  • Globalization can create a mainstream monoculture, driving other predominant cultures down.

  • Globalization empowers multinational corporations (MNCs) while suppressing small businesses.


India is one of the countries that have witnessed large-scale disruptions in all fields of human endeavor. It not only has changed how the country looks at business and corporations but has also changed how people live and enjoy their lives. For most people, globalization has been positive for India as it has offered more income to people and has helped eradicate poverty to a large extent.

However, the bad effects of globalization have also been noticed. The spread of diseases and disorders has led to high spending by the government of India. This has meant that India has witnessed both the positive and negative effects of globalization.


Q1. What are the three main types of globalization?

Ans. The three main types of globalization are economic, political, and cultural globalization.

Q2. Has globalization occurred suddenly or has it taken time to happen?

Ans. Globalization has occurred gradually over the millennia, covering all aspects of the economy, and encompassing all the endeavors of human lives. As it is a global phenomenon, the process has taken enough time to occur.

Q3. What are Free Trade Agreements? Are they related to globalization?

Ans. Free Trade Agreements are agreements for free trade within regions. It allows free trade by participating partners without levying any taxes. Free trade agreements are part of economic globalization as they improve business practices. Examples of free trade agreements include NAFTA or North American Free Trade Agreement.

Updated on 13-Oct-2022 11:19:47