Globalisation

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Globalisation is the policy and process of opening up the Indian economy to other economies of the world through trade, capital flows, and technology. It helps countries connect more closely in econom…

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Globalisation mainly takes place through three channels: opening up world trade, removing barriers to international investment, and free flow of technology between countries.

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Liberalisation means reducing various controls, licensing rules, and permits that regulated the non-agricultural sector before 1991. It makes the economy freer from unnecessary restrictions.

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Privatisation means expanding the role of the private sector and limiting the role of the public sector. It also includes transfer of ownership of public sector enterprises to the private sector.

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Globalisation in the LPG policy means opening up the Indian economy to other economies of the world. It connects India with world trade, foreign investment, and technology.

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The year 1991 is important because it marks a watershed in the growth of the Indian economy. The new economic policy began then, and globalisation started in full earnest in July 1991.

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The seeds of globalisation were sown in the early 1980s through liberalisation of imports, some concessions to foreign capital, and allowing multinational companies to enter some areas of the economy.

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India needed globalisation because of weak pre-1991 policies, a serious foreign exchange crisis, conditionalities imposed by IMF and World Bank, and the fall of the USSR, which affected Indian trade.