Q.How has globalisation affected the employment security of workers in India?
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Start your 14-day free trial to unlock the full solution →Globalisation has significantly weakened employment security for Indian workers by increasing informal, contract-based jobs and reducing the stability of formal employment.
Globalisation in India, particularly after the economic reforms of 1991, opened the economy to foreign competition, investment, and technology. The idea was that integration with global markets would create more jobs and raise incomes. But the effect on employment security has been deeply uneven. While some sectors boomed, the nature of work itself changed in ways that made life less predictable for millions of workers.
The most visible change has been the sharp rise in informal or "unorganised" sector employment. Before globalisation, a large portion of the workforce was already informal, but the reforms accelerated a trend: firms, both domestic and multinational, began to rely heavily on contract labour, temporary workers, and outsourced jobs. Why? Because global competition demands flexibility — companies want to hire and fire quickly in response to market shifts, and they want to avoid the costs of permanent employees (provident fund, gratuity, medical benefits, job security). The result is that even in industries like manufacturing, IT, and services, a growing share of workers are on short-term contracts with no guarantee of renewal.
This is not just about "bad jobs" replacing "good jobs." It is about the erosion of the very idea of a stable career. A worker in a Special Economic Zone or a garment export unit may have a job today but no assurance of one next month.
Another major blow to employment security came from the restructuring of public sector enterprises and the closure of many inefficient state-owned units. Globalisation pushed the government to privatise, disinvest, and "downsize" the public sector. For decades, government jobs had been a bastion of secure, lifelong employment with pensions. As these shrank, workers lost that safety net. Even in the private formal sector, the old model of a permanent job with a single employer for decades has become rare. "Job hopping" is now the norm, but it is often forced — workers are laid off and must scramble for the next opportunity.
Globalisation also exposed Indian workers to international economic volatility. The 2008 global financial crisis, for instance, led to massive job losses in export-oriented sectors like textiles, gems and jewellery, and IT services. Workers who had no formal contracts or social security were the first to be let go, with no compensation. This vulnerability is structural: the more integrated India becomes with global supply chains, the more domestic employment security depends on decisions made in boardrooms in New York, London, or Beijing. …
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