A STUDY ON IMPACT OF LIBERALIZATION AND GLOBALIZATION OF INDIAN INDUSTRY

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1 A STUDY ON IMPACT OF LIBERALIZATION AND GLOBALIZATION OF INDIAN INDUSTRY N.BHUVANESH KUMAR 1 G.NANTHA KUMAR 2 1 Assistant Professor, PG Department of International Business, NGM College, Pollachi 2 Research Student, PG Department of International Business, NGM College, Pollachi ABSTRACT After independence, it has been the vision of Indian government to adopt some economic reforms i.e. Liberalization, Privatization & Globalization. Our govt. adopted liberalization & globalization both as important weapons to enhance industrialization and foreign trade. Now India can export & import commodities freely. The growing integration of economies and societies around the world has been one of the most hotly debated topics in international economics over the past few years. This paper explores the contours of the on-going process of Liberalization and globalization. Throughout this paper, there is an underlying focus on the impact of LPG on Indian economy. It also comments on impact of LPG on Developing countries. But Globalization has also generated significant international opposition over concerns that it has increased inequality and environmental degradation. There is a need to study the impact of globalization on developing countries from the viewpoint of inward foreign direct investment. India has made a tremendous progress in many spheres such as industries, trade, agriculture & finance. Due to liberalization and globalization, government is moving heaven & earth to solve adverse balance of payment. Keywords: Libralisation, Globalisation, Foreign Direct Investment INTRODUCTION Globalization and liberalization has greatly influenced the Indian economy and made it a huge consumer market. Today, most of the economic changes in the country are based on the demand supply cycle and other economic factors. Today, India is the worlds 12th largest economy in terms of market exchange rate and 4th largest in terms of the Purchasing Power Parity. According to a report by the World Bank, the Indian market is expected to grow at around 8 per cent in the year Globalization and liberalization has also made a positive impact on various important economic segments. Today, the service sectors, industrial sectors and the agriculture sector have really grown to a great extent. Around 54 per cent of the annual Gross Domestic Product (GDP) of India comes from the service industry while the industrial and agriculture sector contributes around 29 per cent and 17 per cent respectively. With the improvement of the market, more and more new sectors are coming up and reaping profits such as IT services, chemical, textiles, Oil industry and so on. With the increase in the supply level, the rate of employment is also increasing considerably. STATEMENTOF THE PROBLEM Trade liberalisation measures are introduced to improve the export performance of the country by reducing the barriers to trade. With the opening up of the trade sector it is expected that the country can engage in more trade relations with other Countries in without much restrictions. The ultimate objective of trade reform measure is to improve the competiveness and thereby better export performance. Thus the trade liberalisation measures will improve the export performance by improving the competitiveness, which will improve production, improve quality standards, better 48 icmrrjournal@gmail.com

2 marketing strategy, etc. But the trade policy reform will affectthe different sectors of the economy in a different manner, as there strategies may be different. There may be some sector specific factors determining the impact of reforms when we take into consideration industry level and firm level export performance. SCOPE OF THE STUDY The Present study examines the impact of trade liberalisation of India s exports. The study covers for a period of ten financial years starting from Thus, the study is exclusively on the impact of liberalisation and Globalization on the Indian Economy in the post-reform period. There is a need to study the impact of globalization on developing countries from the viewpoint of inward foreign direct investment. This paper explores the contours of the on-going process of globalization Liberalization and privatization. OBJECTIVES OF THE STUDY Assessing the export of oil and non-oil products. To study the export of India s foreign trade with developing Countries in. To study the Exports of Principal Commodities. To make fruitful suggestions for the growth and success of manufacturing industries in India RESEARCH METHODOLOGY The study is made for the purpose of an in depth analysis of various indicators and its effect on import and export of India s foreign trade. The methodology selected for the study will be here. The planned research design, methods of sample selection, data collection and analysis of results will be explained. DATA SOURCE The study used only secondary data, which are collected from the various sources ministry of commerce, RBI bullet in,etc.the collected data from this source have been complied and used with due care. Other publications and magazines were also used to obtain relevant information s EXIM times, the management accountant, journal of international marketing, international journal of market research. SAMPLE DESIGN The study is made for the purpose of an in depth analysis of various indicators and its effect on export of foreign trade with developing countries. The data for the study is selected based on the availability in order to execute uniformity, the parameter export data year wise is collected from 2010 to TOOLS AND TECHNIQUES Trend Analysis Growth Rate PERIOD OF THE STUDY The study covers a period of 10 years ranging from 2004 to AREA OF THE STUDY The Study area is Chosen by RBI Statistics handbook. 49 icmrrjournal@gmail.com

3 LIMITATIONS OF THE STUDY The study is limited only to impact of trade liberalisation of exports of manufacturing industries in India. Period of the study limited to ten years only. The data used in this study are secondary in nature as given in RBI Statistics handbook. REVIEW OF LITERATURE Dr. Raj Kumar Gautam (2012), Liberalization Impact on Indian Small Industries: An Empirical Study of Punjab, The aim of the paper is to study the impact of liberalization on the Indian Small-Scale Industry in the leading industrial state of Punjab. To ascertain the overall impact of liberalization on the performance of selected small sector units manufacturing textiles, bicycle and bicycle parts, food products and beverages and leather and leather products.kruskal-wallis test has been applied to know the significant differences among the respondents relating to different industries, age and turnover groups with respect to these statements. The test has been applied at assumed p-value =0.05. The statements with less than 0.05 p-value are considered significant and those with p-value more than the assumed value are considered to be insignificant.the findings of the study indicate that small manufacturers are affected in the liberalized era and facing lot of problems to run their businesses. It has been observed that units from all surveyed industries irrespective of age and turnover believed that liberalization has resulted into more competition, increased quality consciousness, difficulty in marketing, dumping of cheaper goods by other Countries in, reduction in profit margin and high level of customer satisfaction. Krishn A Goyal (2006), Impact of Globalization on Developing Countries in With Special Reference To India India s imports in stood at US$ 107 billion recording an increase of percent comparedwith US$ 79 billion in the previous fiscal. Export also increased by 24 percent as compared to previousyear. It stood at US $ 79 billion in compared with US $ 63 billion in the previous year. Oil imports zoomed by 19 percent with the import bill being US $ billion against USD billion in the corresponding period last year. Non-oil imports during are estimated at USD billion, which is percent higher than previous year's imports of US $ billion in The lesson of recent experience is that a country must carefully choose a combination of policies that best enables it to take the opportunity - while avoiding the pitfalls. For over a century the United States has been the largest economy in the world but major developments have taken place in the world economy since then, leading to the shift of focus from the US and the rich Countries in of Europe to the two Asian giants- India and China. Economics experts and various studies conducted across the globe envisage India and China to rule the world in the 21st century. India, which is now the fourth largest economy in terms of purchasing power parity, may overtake Japan and become third major economic power within 10 years. EXPORT PERFORMANCE LIBERALISATION AND GLOBALIZATION OF INDIA It has been attempted to trace out the overall export performance of Liberalisation and Globalization in India. The framework of analysis includes, Trend analysis. Growth analysis LIST OF COUNTRIES USED IN THIS STUDY India's Foreign Trade with OECD Countries 50 icmrrjournal@gmail.com

4 India's Foreign Trade with OPEC Countries India's Foreign Trade with Eastern Europe Countries India's Foreign Trade with Developing Asia Countries India's Foreign Trade with Developing Saarc Countries India's Foreign Trade with Developing Asian Developing Countries India's Foreign Trade with Developing Africa Countries India's Foreign Trade with Developing Latin American Countries Indian Oil Export Indian Non- Oil Exports of Principal Commodities Primary Products Exports of Principal Commodities Manufactured Goods Exports of Principal Commodities Petroleum Products Exports of Principal Commodities Agriculture and Allied Products Exports of Principal Commodities Engineering Goods ANALYSIS AND S TABLE NO: 1 INDIA'S FOREIGN TRADE WITH OECD COUNTRIES , , , , , , , , , , From the above table it is inferred that in the year of 2010 India s foreign trade with OECD Countries in Export was Rs. 3, million and it decreased to Rs. 6, million in the year of To find the trend of India s foreign trade with OECD Countries in Export. Trend analysis has been applied from 2015 to Through Trend analysis it is found that India s foreign trade with OECD Countries in Export has a increasing trend. TABLE NO: 2 INDIA'S FOREIGN TRADE WITH OPEC COUNTRIES , , , , , , , , , , icmrrjournal@gmail.com

5 From the above table it is inferred that in the year of 2010 India s foreign trade with OPEC Countries in Export was Rs.1, million which is increased to Rs.3, million in the year of To find the trend of India s foreign trade with OPEC Countries in Export.Trend analysis has been applied from 2015 to Through Trend analysis it is found that India s foreign trade with OPEC Countries in Export has a increasing trend. TABLE NO: 3 INDIA'S FOREIGN TRADE WITH EASTERN EUROPE COUNTRIES From the above table it is inferred that in the year of 2010 India's foreign trade with Eastern Europe Countries in Export was Rs million which is increased to Rs.2,24.12 million in the year of To find the trend of India's foreign trade with Eastern Europe Countries in Export Trend analysis has been applied from 2015 to Through Trend analysis it is found that India's foreign trade with Eastern Europe Countries in Export has a decreasing trend. TABLE NO: 4 INDIA'S FOREIGN TRADE WITH DEVELOPING ASIA COUNTRIES , , , , , , , , From the above table it is inferred that in the year of 2010 India s foreign trade with Asia Export was Rs.2,526 million which is increased to Rs.5, million in the year of To find the trend of India s foreign trade with Asia Export Trend analysis has been applied from 2015 to Through Trend analysis it is found that India s foreign trade with Asia Export has a increasing trend. 52 icmrrjournal@gmail.com

6 TABLE NO: 5 INDIA'S FOREIGN TRADE WITH DEVELOPING SAARC COUNTRIES , , , , , , From the above table it is inferred that in the year of 2010 India s foreign trade with Saarc Export was Rs.3,96.46 million which is increased to Rs.1,052.8 million in the year of To find the trend of India s foreign trade with Saarc Export Trend analysis has been applied from 2015 to Through Trend analysis it is found that India s foreign trade with Saarc Export has a increasing trend. TABLE NO: 6 INDIA'S FOREIGN TRADE WITH DEVELOPING ASIAN DEVELOPING COUNTRIES , , , , , , , , , , From the above table it is inferred that in the year of 2010 India s foreign trade with Asian Developing Countries in Export was Rs. 2, million which is increased to Rs. 4, million in the year of To find the trend of India s foreign trade with Asian Developing Countries in Export Trend analysis has been applied from 2015 to Through Trend analysis it is found that India s foreign trade with Asian Developing Countries in Export has a increasing trend. TABLE NO: 7 INDIA'S FOREIGN TRADE WITH DEVELOPING AFRICA COUNTRIES , , , , , , , icmrrjournal@gmail.com

7 From the above table it is inferred that in the year of 2010 India s foreign trade with Africa Export was Rs.4, million which is increased to Rs.1, million in the year of To find the trend of India s foreign trade with Africa Export Trend analysis has been applied from 2015 to Through Trend analysis it is found that India s foreign trade with Africa Export has a increasing trend. TABLE NO: 8 INDIA'S FOREIGN TRADE WITH DEVELOPING LATIN AMERICAN COUNTRIES From the above table it is inferred that in the year of 2010 India s foreign trade with Latin American Countries in Export was Rs. 3,05.54 million which is increased to Rs. 7,68.9 million in the year of To find the trend of India s foreign trade with Latin American Countries in Export Trend analysis has been applied from 2015 to Through Trend analysis it is found that India s foreign trade with Latin American Countries in has a decreasing trend. (`in billion) Year Exports(`) Growth(`) , , , , , , , TABLE NO: 9 INDIAN OIL EXPORT Year Trend(`) Growth(`) , , , , , From the above table it is inferred that in the year of 2004 Indian Oil Export was Rs.1,63.97 million which is increased to Rs.3,802.5 million in the year of Through Trend analysis it is found that Indian Oil Export has a increasing trend. 54 icmrrjournal@gmail.com

8 TABLE NO: 10 INDIAN NON- OIL EXPORT Year Exports(`) Growth(`) , , , , , , , , , , Year Trend(`) Growth(`) , , , , , From the above table it is inferred that in the year of 2004 Indian Non-Oil Export was Rs. 2, million which is increased to Rs. 15, million in the year of Through Trend analysis it is found that Indian Non-Oil Export has a increasing trend. TABLE NO: 11 EXPORTS OF PRINCIPAL COMMODITIES PRIMARY PRODUCTS Year Exports(`) Growth(`) , , , , , , , Year Trend(`) Growth(`) , , , , , From the above table it is inferred that in the year of 2004 Exports of Principal Commodities Primary Product was Rs. 4,55 million which is increased to Rs. 2, million in the year of Through Trend analysis it is found that Exports of Principal Commodities Primary Product has a increasing trend. 55 icmrrjournal@gmail.com

9 TABLE NO: 12 EXPORTS OF PRINCIPAL COMMODITIES MANUFACTURED GOODS Year Exports(`) Growth(`) , , , , , , , , , , , From the above table it is inferred that in the year of 2004 Exports of Principal Commodities Manufactured Goods was Rs. 2, million which is increased to Rs. 11, million in the year of Through Trend analysis it is found that Exports of Principal Commodities Manufactured Goods has a increasing trend TABLE NO: 13 EXPORTS OF PRINCIPAL COMMODITIES PETROLEUM PRODUCTS (`in billion) Year Exports(`) Growth(`) , , , , , , , Year Trend(`) Growth(`) Year Trend(`) Growth(`) , , , , , From the above table it is inferred that in the year of 2004 Exports of Principal Commodities Petroleum Products was Rs. 1,63.97 million which is increased to Rs. 3,802.5 million in the year of Through Trend analysis it is found that Exports of Principal Commodities Petroleum Products has a increasing trend. 56 icmrrjournal@gmail.com

10 TABLE NO: 14 - EXPORTS OF PRINCIPAL COMMODITIES AGRICULTURE AND ALLIED PRODUCTS Year Exports(`) Growth(`) , , , , Year Trend(`) Growth(`) , , , , , From the above table it is inferred that in the year of 2004 Exports of Principal Commodities Agriculture and Allied Products was Rs. 3,46.16 million which is increased to Rs. 2, million in the year of To find the trend of Exports of Principal Commodities Agriculture and Allied Products Trend analysis has been applied from 2015 to Through Trend analysis it is found that Exports of Principal Commodities Agriculture and Allied Products has a increasing trend. TABLE NO: 15 EXPORTS OF PRINCIPAL COMMODITIES ENGINEERING GOODS Year Exports(`) Growth(`) , , , , , , , , Year Trend(`) Growth(`) , , , , , From the above table it is inferred that in the year of 2004 Exports of Principal Commodities Engineering Goods was Rs. 5,70.05 million which is increased to Rs. 4, million in the year of To find the trend of Exports of Principal Commodities Engineering Goods Trend analysis has been applied from 2015 to Through Trend analysis it is found that Exports of Principal Commodities Engineering Goods has a increasing trend. 57 icmrrjournal@gmail.com

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13 FINDINGS Export wise In the year of 2012 the export of India s foreign trade with OECD Countries highest growth rate for ( ). Through Trend analysis it is found that India s foreign trade with OECD Countries in Export has a increasing trend. In the year of 2011 the export of India s foreign trade with OPEC Countries highest growth rate for ( ). Through Trend analysis it is found that India s foreign trade with OPEC Countries in Export has a increasing trend. In the year of 2012 the export of India s foreign trade with Asia highest growth rate for ( ). Through Trend analysis it is found that India s foreign trade with Asia Export has a increasing trend. In the year of 2011 the export of India s foreign trade with Saarc highest growth rate for ( ). Through Trend analysis it is found that India s foreign trade with Saarc Export has a increasing trend. In the year of 2012 the export of India s foreign trade with Asian Developing Countries highest growth rate for ( ). Through Trend analysis it is found that India s foreign trade with Asian Developing Countries in Export has a increasing trend. In the year of 2011 the export of India s foreign trade with Africa highest growth rate for ( ). Through Trend analysis it is found that India s foreign trade with Africa Export has a increasing trend. In the year of 2011 the export of India s foreign trade with Latin American Countries growth rate for ( ). Through Trend analysis it is found that India s foreign trade with Latin American Countries in has a decreasing trend. In the year of 2005 the export of Indian Oil highest growth rate for ( ). Through Trend analysis it is found that Indian Oil Export has a increasing trend. In the year of 2009 the export of Indian Non-Oil highest growth rate for ( ). Through Trend analysis it is found that Indian Non-Oil Export has a increasing trend. In the year of 2005 the Exports of Principal Commodities Primary Product highest growth rate for ( ). Through Trend analysis it is found that Exports of Principal Commodities Primary Product has a increasing trend. In the year of 2009 the export of India s foreign trade with OECD Countries highest growth rate for ( ). Through Trend analysis it is found that Exports of Principal Commodities Manufactured Goods has a increasing trend. In the year of 2004 the Exports of Principal Commodities Petroleum Products highest growth rate for ( ). Through Trend analysis it is found that Exports of Principal Commodities Petroleum Products has a increasing trend. In the year of 2012 the Exports of Principal Commodities Agriculture and Allied Products highest growth rate for ( ). Through Trend analysis it is found that Exports of Principal Commodities Agriculture and Allied Products has a increasing trend. In the year of 2011 the export of India s foreign trade with OECD Countries highest growth rate for ( ). Through Trend analysis it is found that Exports of Principal Commodities Engineering Goods has a increasing trend. 60 icmrrjournal@gmail.com

14 SUGGESTIONS To face the challenges from the unfavorable policies and to get benefits from the favorable policies, the Government should start more cluster units, mini industrial parks, industrial societies and special economic zones for micro and small industries products, give more assistance to exporters and industrialists to get national and international quality mark certification, build geographical and common brand name, coordinate all small industrial promotional agencies, strengthen export promotion councils and commodity boards, start more design and fashion technology institutes etc. The Impact of globalization on the Indian economy are wide and could be seen from several angles such as internal and external trade, production, consumption and distribution, overall and sector wise performance, social, economical, political and cultural impacts, and macro and micro level impacts. It may be concluded that the response of the Indian industry to the changes in the economic policy has been reasonably good. Further, in order to reach greater heights, greater autonomy especially for public enterprises is necessary for industry to operate in the new economy. Relaxation of bureaucratic controls is necessary for unshackling industry, attainment of selfsustained growth with social justice. The real solution to the challenges faced by the industry is the shift in the basic character of the industry from less competition to more competition, less quality to the fair quality, primitiveness to modernity and above all from low ethics to good governance. CONCLUSION To sum up, we can say that liberalization and globalization are to be viewed specially in the perspective of National requirements and progress. Unqualified and unlimited liberalization and globalization will lead to an utter economics. But unfortunately in many of the countries, this is what is happening. Therefore, liberalization, though of the hour, is not to be taken for granted to any extent in a country, much less in India where at least two thirds of the population of the country still depend for its livelihood on agriculture, let us not forget that both the concepts of liberalization and globalization have started from the West to serve their own interests. We, Indians, on our part, will adopt both these concepts to the extent to which they are beneficial to our economy. REFERENCE Goyal K A. & P.K.Khicha, Globalization of Business: Future Challenges, Third concept, An International Journal of Ideas. Ojha. A.K., Globalization & Liberalization prospects of new world order, Third concept- An International Journal of Ideas, August Government of India, Planning Commission, Eighth Five Year Plan, New Delhi. And Tenth Five Year plan Jalan, Bimal India s Economic Policy: Preparing for the Twenty-First Century. Penguin Books, New Delhi. Child, john and David K. Tse, China s Transition and its Implications for International Business, Journal of International Business studies, Volume 32 Number icmrrjournal@gmail.com