INTRODUCTION

WHAT IS GLOBALISATION ?
People around the globe are more connected to each other than ever before.
Information and money flow more quickly than ever. Goods and services produced
in one part of the world are increasingly available in all parts of the world.
International travel is more frequent. International communication is becoming
more common. This phenomenon has been titled "globalization."
Globalization is a process of interaction and integration among the people
companies and governments of different nations a process driven by international
trade and investment and aided by information technology. This process has effects
on the environment on culture on political systems on economic
development and prosperity and on human physical well!being in societies around
the world.
The result of greater foreign investment and greater foreign trade has been
greater integration of production and markets across countries. Globalisation is this
process of rapid integration or interconnection between countries. "#$s are
playing a ma%or role in the globalisation process. "ore and more goods and
services investments and technology are moving between countries. "ost
regions of the world are in closer contact with each other than a few decades
back.&esides the movements of goods services investments and technology there
is one more way in which the countries can be connected. This is through the
movement of people between countries. People usually move from one country to
another in search of better income better %obs or better education. In the past few
decades however there has not been much increase in the movement of people
between countries due to various restrictions.
1
GLOBALISATION IN INDIA
Indian economy had e'perienced ma%or policy changes in early ())*s. The new
economic reform popularly known as Liberalization, Privatization and
Globalization +,PG model- aimed at making the Indian economy as fastest
growing economy and globally competitive. The series of reforms undertaken with
respect to industrial sector trade as well as financial sector aimed at making the
economy more efficient.
.ith the onset of reforms to liberalize the Indian economy in /uly of ())( a new
chapter has dawned for India and her billion plus population. This period of
economic transition has had a tremendous impact on the overall economic
development of almost all ma%or sectors of the economy and its effects over the
last decade can hardly be overlooked. &esides it also marks the transition of the
Indian economy into the global economy.
Globalization in India has allowed companies to increase their base of operations
e'pand their workforce with minimal investments and provide new services to a
broad range of consumers.
#otable e'amples of international companies that have done well in India in the
recent years include Pepsi $oca!$ola "c0onald1s and 2entucky 3ried $hicken
whose products have been well accepted by Indians at large.
Globalization in India has been advantageous for companies that have ventured in
the Indian market. &y simply increasing their base of operations e'panding their
workforce with minimal investments and providing services to a broad range of
consumers large companies entering the Indian market have opened up many
profitable opportunities.
Indian companies are rapidly gaining confidence and are themselves now ma%or
players in globalization through international e'pansion. 3rom steel to &ollywood
from cars to IT Indian companies are setting themselves up as powerhouses of
tomorrow1s global economy. ,arge companies entering the Indian market have
opened up many profitable opportunities .
2
Steps taken towards go!a"#at"on and
"!era"sat"on
Indian economy was in deep crisis in /uly ())( when foreign currency reserves
had gone up to almost 4( billion5 Inflation had roared to an annual rate of (6
percent5 fiscal deficit was very high and had become unsustainable5 foreign
investors and #7Is had lost confidence in Indian 8conomy. $apital was flying out
of the country and we were close to defaulting on loans. To combat all these
problems ma%or measures initiated as a part of the liberalization and globalization
strategy in the early nineties included the following9
1.Devaluation: The first step towards globalization was taken with the
announcement of the devaluation of Indian currency by (:!() percent against
ma%or currencies in the international foreign e'change market. In fact this measure
was taken in order to resolve the &alance of Payments +&;P- crisis.
2.Disinvestment $ In order to make the process of globalization smooth
privatization and liberalization policies are moving along as well. Under the
privatization scheme, most of the public sector undertakins have been! are
bein sold to private sector.
".Dismantlin of #he $ndustrial Licensin %eime $ <t present only si'
industries are under compulsory licensing mainly on accounting of environmental
safety and strategic considerations. < significantly amended locational policy in
tune with the liberalized licensing policy is in place. #o industrial approval is
required from the government for locations not falling within => kms of the
periphery of cities having a population of more than one million.
&.'llo(in )orein Direct $nvestment *)D$+: 30I was allowed across a wide
spectrum of industries and encouraging non!debt flows. The 0epartment has put in
place a liberal and transparent foreign investment regime where most activities are
opened to foreign investment on automatic route without any limit on the e'tent of
foreign ownership. ?ome of the recent initiatives taken to further liberalize the
)D$ reime, inter alias include opening up of sectors such as Insurance +upto
=@A-5 development of integrated townships +upto (**A-5 defense industry +upto
=@A-5 tea plantation +upto (**A sub%ect to divestment of =@A within five years to
30I-5 enhancement of 30I limits in private sector banking allowing 30I up to
(**A under the automatic route for most manufacturing activities in ?8Bsetc.
%
,.%esident $ndian -cheme: The general policy and facilities for foreign direct
investment as available to foreign investorsC $ompanies are fully applicable to
#7Is as well. In addition Government has e'tended some concessions especially
for #7Is and overseas corporate bodies having more than @*A stake by #7Is.
..'bolition of the */%#P+ 'ct: It necessitated prior approval for capacity
e'pansion and there were no such restrictions and rules and regulations on
monopoly firms with assets over (** crores.
0.#he removal of 1uantitative restrictions on imports.
2.#he reduction of the peak customs tariff from over D** per cent prior to the D*
per cent rate that applies now.
3.4ide5ranin financial sector reforms in the banking capital markets and
insurance sectors including the deregulation of interest rates strong regulation and
supervisory systems and the introduction of foreignCprivate sector competition.
&
'OSITI() I*'ACTS O+ GLOBALISATION
1 .$ncrease in GDP-
The rate of growth of the Gross Domestic Product of India has been on the
increase from >.@ per cent during ():*!)* to seven per cent in the ())D!=**(
period. $n the last four 6ears, the annual ro(th rate of the GDP (as impressive
at 0., per cent *277"57&+, 2., per cent *277&57,+, nine per cent *277,57.+ and 3.2
per cent *277.570+. Prime /inister /anmohan -inh is confident of havin a
17 per cent ro(th in the GDP in the 8leventh )ive 9ear Plan period.
2. 8mplo6ment 5
.ith globalization companies have forayed into the developing countries and
hence generated employment for them. $t has iven an opportunit6 to invest in
the emerin markets and tap up the talent (hich is available there. In
developing countries there is often a lack of capital which hinders the growth of
domestic companies and hence employment. In such cases due to global nature of
the businesses people of developing countries too can obtain gainful employment
opportunities.
,
".)orein #rade5
#he forein e:chane reserves *as at the end of the financial 6ear+ (ere ; "3
billion *2777571+, ; 170 billion *277"57&+, ; 1&, billion *277,57.+ and ; 127
billion *in )ebruar6 2770+. $t is e:pected that $ndia (ill cross the ; 277 billion
mark soon.
&./arket <apitalisation5
$n respect of market capitalization +which takes into account the market value of a
quoted company by multiplying its current share price by the number of shares in
issue- $ndia is in the fourth position (ith ; 23& billion after the E? +4 (6***
billion- /apan +4 F:** billion- and $hina +4 (***-. $ndia is e:pected to soon
cross the trillion dollar mark.
-
,.$nvestment and <apital )lo(5
;ne of the most visible positive effects of globalization in India is the flow of
foreign capital. #he cumulative )D$ inflo(s from 1331 to -eptember 277. (ere
%s.1, 21,,.. crores *U- ; &".23 billion+.The sectors attracting highest 30I inflows
are electrical equipments including computer software and electronics +(: per
cent- service sector +(D per cent- telecommunications +(* per cent- transportation
industry +nine per cent- etc. In the inflow of 30I India has surpassed ?outh 2orea
to become the fourth largest recipient.
$ndia controls at the present &, per cent of the lobal outsourcin market (ith
an estimated income of ; ,7 billion.

.. $ncrease in =illionaires5
's per the )orbes list for 2770, the number of billionaires of $ndia has risen to
&7 *from ". last 6ear+more than those of /apan +=F- $hina +(6- 3rance +(F- and
Italy +(F- this year. < press report was %ubilant9 #his is the richest 6ear for
$ndia. The combined wealth of the Indian billionaires marked an increase of @* per
cent from 4 (*@ billion in =**@ to 4 (6* billion in =**6. #he &7 $ndian
billionaires have assets (orth about %s. 0.,7 lakh crores (hereas the cumulative
investment in the 31 Public -ector Undertakins b6 the <entral Government of
$ndia is %s. ".3" lakh crores onl6.
/
N)GATI() I*'ACTS O+
GLOBALISATION
AGRICULTUR)
There are various negative impacts of Globalisation the foremost casualty being
the agriculture sector. 'riculture has been and still remains the backbone of the
$ndian econom6. It plays a vital role not only in providing food and nutrition to
the people but also in the supply of raw material to industries and to e'port
trade. $n 13,1, ariculture provided emplo6ment to 02 per cent of the population
and contributed ,3 per cent of the ross domestic product. >o(ever, b6 2771 the
population dependin upon ariculture came to ,2 per cent (hereas the share of
ariculture in the GDP (ent do(n drasticall6 to 2& per cent and further to 22
per cent in 277.570. This has resulted in a lowering the per capita income of the
farmers and increasing the rural indebtedness.
The agricultural growth of D.= per cent observed from ():* to ())6 decelerated to
two per cent subsequently. The <pproach to the 8leventh 3ive Gear Plan released
in 0ecember =**@ stated that the growth rate of agricultural G0P including
forestry and fishing is likely to be below two per cent in the Tenth Plan period.
The reasons for the deceleration of the growth of agriculture are given in the
8conomic ?urvey =**@!*69 ,ow investment imbalance in fertilizer use low seeds
replacement rate a distorted incentive system and lo post!harvest value addition
continued to be a drag on the sectors performance. .ith more than half the
population directly depending on this sector low agricultural growth has serious
implications for the inclusiveness of growth.
The number of rural landless families increased from D> per cent in ():6 to F> per
cent in ())) further to >> per cent in =**>. The farmers are destined to die of
starvation or suicide. 7eplying to the ?hort 0uration 0iscussion on Import of
.heat and <grarian 0istress on "ay (: =**@ <griculture "inister ?harad Pawar
informed the 7a%ya ?abha that roughly ( ***** farmers committed suicide during
the period ())D!=**D mainly due to indebtedness.
0
0uring the post!reform period India has been shining brilliantly with a growing
number of billionaires. #obody has taken note of the sufferings of the family
members of those unfortunate hundred thousand farmers.
3urther the proportion of people dependin in $ndia on ariculture is about .7
? (hereas the same for the U@ is 2 ?, U-' 2 ?and Aapan " ?. The developed
countries having a low proportion of population in agriculture have readily
adopted globalization which favors more the growth of the manufacturing and
service sectors.
GROWTH O+ UN)*'LO1*)NT AND 'OW)RT1
The proportion of the unemployed to the total labor force has been increasing from
=.@= per cent +())D!)F- to =.6: per cent +()))!=***- and D.*@ per cent +=**F!*>-.
In absolute figures the number of unemployed in those years had been ).*=
million (*.>( million and (D.(* million respectively. +8conomic ?urvey =**@!*6
Table (*.F-
'bout the impact of lobalization, in particular on the development of $ndia, the
I,; 7eport +=**F- stated9 In India there had been winners and losers. The lives of
the educated and the rich had been enriched by globalization. The information
technology +IT- sector was a particular beneficiary. &ut the benefits had not yet
reached the ma%ority and new risks had cropped up for the losers9 the socially
deprived and the rural poor.
2
SOCIAL S)R(IC)S
<bout the quality of education given to children the <pproach to the 8leventh
3ive Gear Plan stated9 < recent study has found that D: per cent of the children who
have completed four years of schooling cannot read a small paragraph with short
sentences meant to be read by a student of $lass II. <bout >> per cent of such
children cannot divide a three digit number by a one digit number. These are
indicators of serious learning problems which must be addressed.
The less said about the achievements in health the better. The <pproach to the
8leventh Plan concedes that progress implementing the ob%ectives of health have
been slow. The 7eport gave the particulars of the rates of infant mortalit6 *per
1777 live births+ for $ndia as .7 aainst -ri Lanka *1"+, <hina *"7+ and Bietnam
*13+. #he rate of maternal mortalit6 *per 1, 77,777 deliveries+ of $ndia is &70
aainst -ri Lanka *32+, <hina *,.+ and Bietnam *1"7+.
GROWTH O+ SLU* CA'ITAL
In his =**6!*: &udget ?peech 3inance "inister $hidambaram put forth a
proposal to promote /umbai as a (orld class financial centre and to make
financial services the ne't growth engine of India.
Cf its 1" million population, /umbai cit6 has ,& per cent in slums. It is
estimated that (** to D** new families come to "umbai every day and most land
up in a slum colony. 3rom being known as the slum capital of India and the biggest
slum of <sia "umbai is all set to become the slum capital of the world.
The population of 0elhi is about (F million of which nearly F> per cent population
lives in slums unauthorized colonies // clusters and undeveloped rural parts.
0uring dry weather these slum dwellers use open areas around their units for
defecation and the entire human waste generated from the slums along with the
additional wastewater from their households is discharged untreated into the river
Gamuna.
13
The cumulative 30I inflows +until ?eptember =**@- to the #ew 0elhi region was
of 7s. =6D@) crores and to "umbai 7s. =F>F> crores. The two spots of #ew
0elhi and "umbai received F@ per cent of the total 30I inflows into India.
#he )D$ inflo(s have in no (a6 assisted in improvin the health and
environment conditions of the people.
Cn the other hand, the financial capital of $ndia and the political capital of
$ndia are set to become the topmost slum cities of the (orld.
11
CAS) STUD1456donad7s
T8e s966ess:9 ;o9rne< o: an e=tre5e<
pop9ar "nternat"ona !rand "n "nd"a WITH TH)
H)L' O+ GLOBALISATION.
T8e !rand4 56donad7s
"c0onaldHs is the worldHs leading food service retailer with more than D(***
restaurants in (() countries serving more than >* million customers each day.
$elebrating over (= years of leadership in food service retailing in India
"c0onaldHs now has a network of over (@* restaurants across the country with its
first restaurant launch way back in ())@. Prior to its launch the company invested
four years to develop its unique cold chain which has brought about a veritable
revolution in food handling immensely benefiting the farmers at one end and
enabling customers to get the highest quality food products absolutely fresh and at
a great value.
B)GINNING
12
.hen "c0onalds started in India in())@ people in "umbai and 0elhi typically
ate out three to five times a month. In the (= years since then that average
frequency has doubled and analysts forecast that by =*(= the Indian quick service
restaurant market will be worth D**** crore.
&ut from their earliest investments in India multinational company +"#$- owners
of restaurant chains have struggled to adapt to the needs of IndiaHs many markets.
?ome pulled out of the country after failed ventures. <t the time consolidation of
the hugely fragmented Indian retail sector had also barely begun and there was
scepticism that Indians would prefer burgers and fast food to local food offerings.
Iowever in the intervening decade "c0onaldHs has continued to open new
outlets in the country evolving its marketing strategy through several phases.
Twe>e <ears o: *6Donad?s Ind"a
"c0onaldHs India was set up as a >*9>* %oint!venture between "c0onaldHs at a
global level and regional Indian partners such as Iardcastle 7estaurants Private
,imited in western India and $onnaught Plaza 7estaurants Private ,imited in
northern India.
The first Indian "c0onaldHs outlet opened in "umbai in ())@. ?ince then outlets
have opened in various metropolitan and Tier II towns across the country. &y
?eptember =**: it had premises in "umbai &angalore &aroda Pune Indore
#asik $hennai Iyderabad ?urat and <hmedabad.
'8ase I$ La9n68"ng t8e !rand
The starting point for "c0onaldHs India was to change Indian consumersH
perceptions which associated it with being HforeignH H<mericanH Hnot knowing
what to e'pectH and Hdiscomfort with the new or differentH. "c0onaldHs wanted to
position itself as HIndianH and a promoter of Hfamily values and cultureH as well as
being Hcomfortable and easyH. ?imultaneously the brand wanted to communicate
that operationally it was committed to maintaining a quality service cleanliness
and offering value for money.
Entil =*** "c0onaldHs India did not have enough reach to use mass media such
as television advertising. Instead most of its marketing effort focused on outlet
1%
design new store openings and P7 about its attempts to tailor a menu to Indian
tastes.
Products like "c<loo Tikki burger Jeg Pizza "cPuff and $hicken "cGrill burger
were formulated and introduced using spices favored by Indians. The menu
development team had been responsible for special sauces which used local spices
and did not contain beef and pork. ;ther products too did not contain eggs and
were (**A vegetarian. The Indianized products had been so well received that
"cdonald1s even e'port "c<loo TikkiK burger and Jeg. Pizza "cPuffK to the
"iddle 8ast."
.hen "c0onaldHs launched it took a conscious call of not introducing any beef or
pork in our products. Thus when controversies around "c0onaldHs products
started during the early and growth stages of the Indian business it reacted quickly
by having separate vegetarian and non vegetarian platforms! a first in any market
for "cdonald1s.
'8ase II $ !rand ad>ert"s"ng
&y =*** "c0onaldHs India was ready to begin TJ advertising. The first Indian TJ
commercial ?tage 3right attempted to establish an emotional connection between
the +Indian- family and the brand.
The ?tage 3right campaign aimed to establish "c0onaldHs as a familiar
comfortable place. It featured a child who suffers stage fright and is unable to
recite a poem. ;n entering "c0onaldHs he easily recites it in the storeHs familiar
environment.
These storylines were supported by other initiatives. The companyHs one!minute
service guarantee attempted to reinforce its reputation for fast friendly and
accurate service and it also ran in!store events for mothers and children.
To kids sitting on the 7onald "c0onald bench pumping sauce from the sauce
machine became brand rituals.
In the launch phase the communication focused solely on building brand and
product relevance. The brandHs scores on relevance to families and kids were very
high.
1&
,ater "c0onaldHs realized there was untapped potential in the youth audience who
considered "c0onaldHs e'pensive and mainly for children.
In =**F "c0onald1s launched the L Iappy Price "enuMwith a value message for
a younger audience. 3or the first time "c0onaldHs India saw a surge of younger
consumers and people from socio!economic classes walk into its stores.
'8ase III$ Appea"ng to !ot8 ends o: t8e age
spe6tr95
In =**: the latest campaign from the "c0onalds!,eo &urnett stable uses father!
son duos from the Indian film industry to reiterate the theme of "GesteryearHs
Prices". It features &ollywood stars from past decades together with their sons and
a message that prices have not risen in line with the passage of time.
The Iappy Price campaign has also been promoted via virals. ;utdoor has also
promoted a home delivery option in a country where home delivery is common in
urban areas. "c0onaldHs has also been e'ploring strategic tie!ups with Indian
sports properties such as the IP, cricket tournament where it was one of the
eventHs food providers.
CONCLUSION
Thus we can conclude by saying that the %ourney of "c0onald1s in India was not
at all easy. It had to work very hard to establish itself in a country where not many
people had even heard about dishes like LburgersM forget eating them. Iowever
due to e'tensive marketing and advertising it established itself very successfully
and has become a success story for many other international brands to follow. <ll
this was possible due to Globalisation and we can say with utmost pride that
/cDonaldDs is a positive impact of Globalisation in $ndia.
CONCLUSION
1,
Though at present India appears to be dominant in some fields of development
this prosperity may be challenged by other competing countries which are
equipping themselves with better standards of higher education. <s detailed
earlier our proress in education has been slo( and superficial, (ithout depth
and 1ualit6, to compete the international standards.
The government should take immediate steps to increase agricultural production
and create additional employment opportunities in the rural parts to reduce the
growing inequality between urban and rural areas and to decentralize powers and
resources to the panchayati ra% institutions for implementing all works of rural
development. ?teps should be taken so as to provide better irrigation facilities to
the farmers for carrying out their agricultural activities.
$t should be remembered that (ithout a sustainable and productive ro(th of
the aricultural sector, the other t6pes of development in an6 sphere (ill be
unstable and illusor6. Despite the concerted development in manufacturin and
service sectors, despite the remarkable inflo( and overflo( of forein reserves,
ariculture is still the larest industr6 providin emplo6ment to about .7 per
cent of the (orkforce in the countr6.
Thus in conclusion we can say that mere growth of the G0P and others at the
macro level in billions does not solve the problem of poverty and backward level
of living norms of the people at the micro level. The growth should be sustainable
with human development and decent employment potential. The welfare of a
country does not percolate from the top but should be built upon development
from the bottom.
BIBLIOGRA'H1
1-
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N.R. GUPTA
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!"A# $"ATT
%.Indian Economy and &'allen(es of
Globalisation
#A&"AN) "AN)ELA
*.Globalisation and Its Im+act ,n Indian
Economy
!.. &",U$E- and N.G. PEN)!E
..Globalisation and T'e Indian Economy
RA/I PRAA!" -A)A/0 RAGINI )EEP AN)
PU1A R,-
2. 333.(oo(le.com
4.Globalisation and $usiness #ana(ement
G.!. $ATRA
5. 333.mcdonaldsindia.com
1/
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