Role of Globalization in Economic Growth of India:Business Policy, Strategy and Economic Issues

Growing integration of economies has transformed the world economy as a global village. Globalization helped to remove all the barriers between the countries, facilitates trade expansion, foreign inflow of capital, labour and technology. In early nineties Indian government has taken major steps for the economic reforms in the form of Liberalization, Privatization and Globalization. The major steps for globalization were the devaluation of Indian currency, allowing Foreign Direct Investment (FDI), removal of quantity restriction on import and financial sector reforms. It was observed that the average annual growth rate in 1990-2000 was 6%, which changed the scenario and India became the fastest growing economy in 1990s. Yet India’s trade share with world economy was very low due to gradual growth of infrastructure and unequal industrial growth. The on-going process of globalization can change the scenario if it is used with some precautionary measures and implemented properly. For the purpose of analysis some economic variables have been taken which are as GDP, Foreign direct Investment, foreign exchange reserve, export and import of the country. The objective of this paper is to analyse the relationship between globalization and economic growth. Secondary sources of data are used for the purpose of analysis which is collected through government website, published journal and newspaper articles. After the analysis of economic variable it can be seen that globalisation stimulated the economic growth of India, growth rate improved, foreign exchange crunch in 1991 moved towards surplus, FDI inflows increased but there were some economic issues which created hindrances in the path of growth such as declined agriculture share in GDP, high rate of labour mobility, fragile financial market. This paper is divided into four sections. First section is dictated to Introduction, Literature Review, Objectives and Research Methodology. In Second section major steps which are taken for globalization are discussed. Third section is of result and discussion in which impact, strategy and economic issues of globalization on Indian economy are discussed and at last conclusion and suggestion are discussed.