Globalization and Indian Industries Essay Example | Topics and Well Written Essays - 1500 words

Globalization and Indian Industries - Essay Example Closeness to the technological frontier to fight the entry of the external competitors is considered to be very significant in this connection. The industries that have capability to improve their technological strength for investing in the updation of the production systems would be able to withstand the competition (Mishra, 2006). Thus the industries in this group tend to flourish and perform well under liberalized regime. While the companies that were very weak didn't have the enough strength to enhance their capacity and elevate them in towards the technological frontier. Thus most of these units have shorter business life span and ultimately get eliminated from the race. Thus the industries having very low technological frontiers would be losers under the globalised business environment (Mishra, 2006). Indian experiment on globalization started in the year 1991 with the major sectors involved being steel, pharmaceutical, petroleum, chemical, textile, cement, retail and BPO (Business maps of India.com, n.d.). The government had expected that high rate of growth could be achieved by inviting large volumes of foreign direct investments. A comparison on the number of companies that operated in India across pre and post-liberalized era clearly show the impact of the policy change. Earlier to 1991, the number of factories in India stood at 1,10,179 while their number reported in the year 2004 was 1,29,074. The first observable signs in this direction after the implementation of the polices were setting up of different companies with foreign investments for enhancing its operation in the above-mentioned sectors. This is said to have helped to address the local unemployment problems to a significant level and thus reducing the poverty levels in a few of the locations (Mishra, 2006). Also indirect benefits were obtained as a result of considerable improvements in the technology and management that the domestic companies had to attain to face the competition from their foreign counterparts having highly efficient production systems. On the other hand, the consumer preferences in buying also had a sporadic shift. The Indian consumer who were mostly dependent on the domestic products had the opportunity to purchase quality products at affordable prices. This had resulted in the lowering of business volumes of the pharmaceutical, chemical, manufacturing, and cement manufacturing industries (Business maps of India.com, n.d.). Also, the companies resorted to various structural adjustments like lowering of profits, which threatened the viability of long-term operations. Another striking feature was the reduction in the labour strength across the sectors. The labour statistics available for the year 1990 was 81,62,504 and those for the year 2004 was lowered to 78,70,081. Thu s the influence of globalization policies on the poverty reduction in India as a whole is very ambiguous (Mishra, 2006). Hence a The sector specific assessment on the impact of the globalization is as given below (i) Petroleum Industry: Globalization of the petroleum Industry had begun much before the