Impact of Global Impact of Global IntegrationIntegration

Group Members

Aartika Sardana(01)

Abhijit Singh(02)

Akanksha Tikku(05)

Jasmeet Singh(29)

Prateek Singh(51)

Udit Jain(68)

Vineet Malpani(72)

Global Integration describes an ongoing process by which regional economies, societies, and cultures have become integrated through a globe-spanning network of communication and trade.

Economic Globalization: the integration of national economies into the international economy through trade, foreign direct investment, capital flows, migration, and the spread of technology.

The term can also refer to the transnational circulation of ideas, languages, or popular culture through acculturation.

The Growing Interdependence of Countries worldwide through increasing volume and variety of Cross Border transactions in goods and services and of international capital flows, and also through more rapid and widespread diffusion of Technology. International Monetary Fund

GlobalizationGlobalization

Opening up of world tradePopulation and goods migrationAdvanced means of communicationExchange of technology and knowledge

Global Integration (+ve)Global Integration (+ve)

Global Competition and imports keep a lid on prices so Inflation is less likely to derail economic growth.

An open Economy spurs with fresh ideas from Abroad.

Unfettered capital flows give the access to foreign investment and keep inflation Low.

A lot of Jobs for countries like India where Cheap skilled labor is easily available.

Global Integration (-ve)Global Integration (-ve)

Millions of Job Losses due to imports or product shifts to other countries.

Workers face pay cut demands from employers, which often threaten to export Jobs

Competitive advantage is lost when companies build advanced factories in Low wage countries, making them more productive as those at home.

Replacement of indigenous products by modern products, resulting in the ruin of traditional crafts and industries and the livelihood of people

Globalization of Indian BusinessGlobalization of Indian Business

Factors Favoring Globalization in India

Factors Against Globalization in India

Human Resource Government Policy

Growing Entrepreneurship High Cost

Growing Domestic Market Poor Infrastructure

Niche Markets Obsolescence

Liberalization Resistance to Change

Expanding Markets Trade Barriers

Growing Competition Growing Competition

The Economic RecessionThe Economic Recession

Impact on India Impact on India

The Effects were subdued because

Indian financial sector particularly our banks have no direct exposure to tainted assets and its off-balance sheet activities have been limited.

India’s growth process has been largely domestic demand driven and its reliance on foreign savings has remained around 1.5 per cent in recent period.

India’s comfortable foreign exchange reserves provide confidence in our ability to manage our balance of payments notwithstanding lower export demand and dampened capital flows.

Rural demand continues to be robust due to mandated agricultural lending and social safety-net programmes.

India’s merchandise exports are around 15 per cent of GDP, which is relatively modest.

Contd…Contd…

Stock MarketsStock Markets The economy and the stock market are closely related as the

buoyancy of the economy gets reflected in the stock market.

Corporate profitability also exhibited negative growth in the last three successive quarters of the year

The Major Reasons for the Stock Market Decline were outlined as:-

Drying up of overseas financing for Indian banks and Indian corporate;

Constraints in raising funds in a bearish domestic capital market;

Decline in the internal accruals of the corporates

Forex MarketsForex Markets

In India, the current economic crisis was largely insulated by the reversal of foreign institutional investment (FII), external commercial borrowings (ECB) and trade credit.

The Recorded fall in the nominal value of the rupee was from Rs. 40.36 per USD in March 2008 to Rs. 51.23 per USD in March 2009.

Moreover, there was a reduction in the capital account receipts in 2008-09 with total net capital flows falling from USD 17.3 billion in April-June 2007 to USD 13.2 billion in April-June 2008

Impact on GDPImpact on GDP

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Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q42007-2008 2008-2009

GDP Growth in India

Import ExportImport Export

ConclusionConclusionThe intent of globalization is efficiency improvement

and market optimization taking advantage of the opportunities of the global environment.

There are a number of favorable factors for globalization of Indian Business like the growing Human Resource, Growing Domestic Market and Growing Foreign Market. If the Indian forms can muster latest technology to obtain latest technology in the world, to raise cheap finance and procure the best material, they will be on a good position at the global pedestal.

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