Globalisation

Globalisation is generally understood to mean the integration of a country's economy with the world economy. But this simple definition hides the fact that globalisation is really a complex, many-sided phenomenon rather than a single policy.

What globalisation actually involves:

Globalisation is the outcome of a whole set of policies that are aimed at transforming the world in the direction of greater interdependence and integration among nations. It involves the creation of networks and activities that cut across, or transcend, economic, social and geographical boundaries. In other words, it links countries so closely that money, goods, services, information and people flow across borders far more freely than before.

Because of these links, what happens in one part of the world can affect life in another. Globalisation attempts to establish connections in such a way that events happening thousands of miles away can influence the happenings in India, and vice versa. It seeks, in effect, to turn the world into a single whole — to create, as far as economic life is concerned, a kind of borderless world in which national boundaries matter much less than they once did.

How it relates to India's reforms:

Globalisation is closely connected to the liberalisation and privatisation measures discussed earlier. The opening up of trade, investment, finance and the foreign exchange market all helped integrate India more deeply into the world economy. Globalisation should therefore be seen not as an isolated event but as the broader result of many liberalising steps working together.

What this section goes on to examine:

The chapter looks in detail at two especially important features of globalisation as they concern India:

• Outsourcing, one of the major outcomes of the globalisation process, in which companies in developed countries obtain services from countries like India. …