Globalization in India

Globalization in India has allowed companies to increase their base of

operations, expand their workforce with minimal investments, and provide
new services to a broad range of consumers.

The process of globalization has been an integral part of the recent economic
progress made by India. Globalization has played a major role in export-led growth,
leading to the enlargement of the job market in India.

One of the major forces of globalization in India has been in the growth of
outsourced IT and business process outsourcing (BPO) services. The last few years
have seen an increase in the number of skilled professionals in India employed by
both local and foreign companies to service customers in the US and Europe
in particular. Taking advantage of India’s lower cost but educated and English-
speaking work force, and utilizing global communications technologies such as voice-
over IP (VOIP), email and the internet, international enterprises have been able to
lower their cost base by establishing outsourced knowledge-worker operations in
India.

As a new Indian middle class has developed around the wealth that the IT and BPO
industries have brought to the country, a new consumer base has developed.
International companies are also expanding their operations in India to service this
massive growth opportunity.

Notable examples of international companies that have done well in India in the
recent years include Pepsi, Coca-Cola, McDonald’s, and Kentucky Fried Chicken,
whose products have been well accepted by Indians at large.

Globalization in India has been advantageous for companies that have ventured in
the Indian market. By simply increasing their base of operations, expanding their
workforce with minimal investments, and providing services to a broad range of
consumers, large companies entering the Indian market have opened up many
profitable opportunities.

Indian companies are rapidly gaining confidence and are themselves now major
players in globalization through international expansion. From steel to Bollywood,
from cars to IT, Indian companies are setting themselves up as powerhouses of
tomorrow’s global economy.
Driving and Restraining Forces
(International Marketing)

There are a number of forces which induce and propel globalization and thereby expand
the scope and importance of international marketing. On the other hand there are also
forces with restrain globalization.

The important forces driving globalization are the following:-

Liberalization: One of the most important factors, which have given a great impetus to
globalization since the 1980s is the almost universal economic policy liberalizations
which are fostering a borderless business world. While a lot of the liberalizations owe it
to the Global Agreement on Trade and Tariff (GATT) / World Trade Organization
(WTO), substantial liberalization have been occurring outside the GATT/WTO like, for
example the revolutionary economic policy changes in China and other
socialist/communist nations It may be noted that it has become quite common to describe
the global trend as LPG (liberalization, privatization and globalization) indicating the
mutually interdependent and reinforcing nature of these forces. One of the impacts of
liberalization and privatization is the surge in cross border M&A (mergers &
acquisitions) and other FDI (foreign direct investment) resulting in greater global
economic integration.

Multinational enterprises which link their resources and objectives with world market
opportunities, have been a powerful force driving globalization. Taking advantage of the
liberalization trend, there has been a fast growth of the number of MNC and their global
network of affiliates. The MNC leverage their strengths to link global resources and
opportunities and thereby strengthen the globalization trend.

Technology is a powerful driving force of globalization. Technological advances have

tremendously fostered globalization. Several technological developments become
compelling reasons for internalization. Technological break through are substantially
increasing the scale economies and the market required to break even.

Technological revolution in several spheres, like transport and communication, has given
a great impetus to globalization by their tremendous contribution to reduce the
disadvantages of natural barriers like distance and cost. The developments in the field of
air cargo transportation has fostered globalization by enabling quick and safe
transportation of sensitive goods like perishables and goods subject to quick changes in
fashion/taste. Developments of containerization and refrigeration have also been of high
significance. The steep fall in the cost of transportation and communication has
considerably accelerated pace of globalization. All these have contributed to the drastic
transformation of the logistical and global distribution of the value chain system. The
world wide web has a stupendous impact on globalization. Global sourcing was
encouraged not only by trade liberalization but also by technological developments which
reduced transport costs. Advent of containerization and super tonnage cargo ships
drastically reduced transport costs.

The IT revolution has made an enormous contribution to the emergence of the global
village.

The cost of new product development is very huge in several industries such as
pharmaceuticals. To recoup such high costs a global market is required. A corollary is
that the fast technological changes, which hasten product obsolescence, necessitate a
short pay back period, which can be realized only with a very large market.

Further, because of the huge investment and diverse skill requirements associated with
new product development, cross border alliances in research and development are
becoming more and more popular. Again, in a number of cases different phases of the
product development are carried out in different countries either by a company’s own
affiliates or by outsourcing.

Quality and cost:

The two most important determinants of demand are the quality and price of the offering.
These can be better achieved when a firm is global in its operations.

Rising Aspirations and Wants: Because of the increasing levels of education and
exposure to the media, particularly the electronic media, aspirations of people all around
the world are rising. They aspire for everything that can make life more comfortable or
satisfying. If domestic firms are not able to meet the wants, they would naturally turn to
foreign firms. The customer today is, by and large, global. He wants a world class
product or a product of desired attributes at international price. He may desire a product
available anywhere in the world. His aspirations cannot be tied down to the domestic
availability.