Impact of Globalisation on India

Globalisation has been an all-encompassing phenomenon that has changed the shape of global societies and institutions. It affected India’s society, economy, foreign policy and security situation. Thanks to globalisation, India is the fifth largest economy in the world today with a GDP of $2.8 trillion

By Pranay K Shome


Globalisation is the process of increasing and intensifying interconnectedness among societies and institutions along financial, commercial, cultural and social domains. It refers to the metamorphosis of the Homo Sapiens community into a single entity notwithstanding their economic, cultural and social differences – a global village of sorts. Globalisation began in the late 1980s and reached its zenith in the 1990s and early 2000s when the cold war was over and the Soviet Union had faded into history.

Globalisation’s impetus was due to the ascendance of new ideas in the political and economic domain. In the political domain, it marked the global victory of liberalism and liberal democracy, something which Francis Fukuyama in his magnum opus book The End of History & The Last Man had articulated. In the economic domain, it was marked by the victory of capitalism, albeit not the laissez-faire notion of capitalism but a welfarist notion of capitalism which was counterweighed by the rise of neo-liberalism or libertarianism. Nevertheless, welfare capitalism dominated the economic discourse. The defining features of this new capitalism are the buzzwords – LPG (Liberalisation, Privatisation, Globalisation).

Coming back to the main issue, globalisation ensured that no corner, geopolitical and geoeconomic region remain immune to its reach, the third world countries were no exception, almost every country in the world was impacted by this transformational phenomenon. One such third-world country which was impacted by globalisation was India.

For India, one of the most diverse multi-ethnic, multi-lingual, multi-cultural nation-states, the impact was not unidimensional, it wasn’t confined to the economic dimension but covered other areas of the polity and economy of Bharat. The areas which were impacted are as follows:


Perhaps the most important area where globalisation had its most powerful and ubiquitous impact was in the economic arena. India in the 1980s was going through an economic crisis thanks to the ossified nature of the state-led socialist mode of planning, lack of investment and lack of strong human capital. The seventh five-year plan (1985-1990) which led to the partial opening up of the economy was disastrous as it promoted growth at the expense of buying costly imports which due to a lack of adequate foreign exchange reserves India couldn’t service.

This situation was exacerbated by the first Gulf War which led to a chronic Balance of Payment (BOP) crisis causing the Rao-Manmohan government to formulate the path-breaking 9th five-year plan and the new Industrial policy of 1991 by which India opened up with the help of the Extended Fund Facility (EFF) programme of the IMF.

In 1991, when India started opening up to the rest of the world through the policies of deregulation and deregistration of industries, the country’s socialist state-led planning faded into oblivion and private-sector participation increased manifold

This period was marked by India throwing itself open to the rest of the world through the policies of deregulation and deregistration of industries, followed by aggressive privatisation or disinvestment of non-strategic public sector enterprises. The result is that India’s socialist state-led planning faded into oblivion and private-sector participation increased manifold.

At present, India, thanks to globalisation is the fifth largest economy in the world with a GDP of $2.8 trillion, ranks 3rd in terms of purchasing power parity (PPP), and is an IT superpower. However, other sectors are not lagging behind. India’s tryst with globalisation led it to adopt in accordance with the ideas advocated by renowned economists such as Milton Friedman and Arvind Subramanian2 that exports are the key to the growth of any country to adopt export-friendly policies, the result- India achieved the historic mark of $400 billion worth of exports last year. The fiscal year 2022-23’s defence exports were the highest3 since the globalisation process began in the 1990s.

Culture and society

Any discussion on globalisation’s impact on India would be incomplete without undertaking an overarching study on the socio-cultural dimension. Indian society has been an interesting source of study for social scientists, sociologists, anthropologists etc. Indian society had demonstrated the amazing resilience to hold itself together in the face of external invasions and contacts, this allowed it to develop into a syncretic society. However, in the context of globalisation, the situation was different, Indian society was thrown open to the rest of the world to explore, amalgamate and possibly fuse. While this has multiple layers, the points of friction weren’t less.

From the societal perspective, India found itself absorbing and assimilating the positive and negative things of Western and other societies. Most notably, the globalising effect was seen in the loosening of the traditional tight-knit family structure of India as evidenced by the increasing urge among the new generation to opt for nuclear families, a rather bizarre yet widespread impact of this globalisation is the concept of live-in or co-habitation between non-married couples! Also, Indic and other foreign societies as a result of globalisation began a process of institutional and cultural intermingling marked by the exchange of ideas, objectives, and ways of life which often weren’t always rosy or smooth, frictions did exist as is evident from the friction between the older and modern generations starting from the basic issues of family, work life, lifestyle habits to intellectual issues like conservation of nature, ideational existence etc.

From a cultural perspective, India went through distinct changes, while Indian culture and practices particularly the Indic culture and practices were exported to other parts of the world at different historical points of time, yet globalisation allowed the dissemination of such practices and changes on a mass scale. The most important among them was the export of Indic soft power indicators like Yoga and the idea of sustainable development which despite being a Western concept was very much rooted in the Indic way of life. However, with globalisation came friction points. The late Harvard academic Samuel P Huntington propounded the Clash of Civilisations thesis in an article and later a book by the same name in which he argued that in a globalised world frictions among nations will be on the basis of culture occurring both at the macro and micro levels.

One of the key challenges of the globalisation process was to promote the syncretic order as far as the domestic issues of India were concerned i.e promoting a cosmopolitan way of life ensuring in the process to create a value system integral to India.

Foreign policy

One of the consequential areas where globalisation really impacted India was in the realm of foreign policy. A crucial premise on which India opened itself to the rest of the world is because of the demise of the Soviet Union, which was one of the primary pillars of Indian foreign policy. This made India realise that given the end of the cold war, it can no longer apply a siloed approach to its foreign policy and must warm up to the West, this involved slowly engaging with the USA, Europe and South-East and East Asian countries. This became the theoretical base for the Look East Policy of the 1990s.

One of the consequential areas where globalisation really impacted India was in the realm of foreign policy. A crucial premise on which India opened itself to the rest of the world is because of the demise of the Soviet Union

One of the outcomes of globalisation for Indian foreign policy was that it allowed India to diversify its foreign policy portfolio which included strengthening ties with the US, Israel etc. The US-India relationship has especially been monumental growing by leaps and bounds, now the US is the largest bilateral trade partner of India.

Globalisation also led to the crystallisation of the notion of the Indo-Pacific as an idea propounded by the late Japanese premier Shinzo Abe in 2007.4 This has grown to be a fundamental aspect of Indian foreign policy of late. Another key aspect of this opening up is the boom in the commercial and economic relationship with China, while things at the border remain tense, yet, India-China trade continues to flourish.

A key feature of this globalisation’s impact was the search for India of strategic autonomy. Since the early days of globalisation till now, various Indian dispensations have been trying to maintain a balance between different countries with India doing a delicate balancing game between the West on one hand and Russia and China on the other hand, if seen in the context of Russo-Ukraine war or Indo-Pacific.


A key aspect of globalisation’s impact on India is in the domain of security. Globalisation ratcheted up security threats to India, this is evident from the flight of several Khalistani and Islamist terrorists and terror networks operating on foreign soil most notably in the UK, Canada, Australia, the US etc. A good example of this heightened security threat is the 26/11 attacks, one of the key conspirators of this dastardly attack on Mumbai was David Coleman Headley, who was a Pakistani-American. Also, the recent attack by Khalistanis on the Indian mission in the UK is a testimony to globalisation of security threats.

Another angle is the threats posed in the maritime domain, the seizure of a huge stash of drugs off the coast of the Arabian Sea last year was done via ports in Iran and Afghanistan which were en route to India, therefore, this presents a security challenge to India.

Further, the invention of the internet has expanded the security threat in the form of cyber-attacks. Cyberspace is considered the new domain of warfare which largely consigns to the irrelevance of the use of firearms, the cyber-attack on AIIMS New Delhi5 by Chinese hackers points to this bane of globalisation.


Globalisation also spread to the education sector of India. With the universalisation of the free-market society and economy, education in India has been commercialised, characterised by the springing up of various private educational institutions offering vocational and specialised education on various issues, this has led to a growing disparity, with education becoming more accessible to the more upwardly mobile at a cost, while the government struggles to keep education free and affordable.

Globalisation ratcheted up security threats to India, this is evident from the flight of several Khalistani and Islamist terrorists and terror networks operating on foreign soil most notably in the UK, Canada, Australia and the US

As the job market becomes narrower and more precise about the skills it requires, the polarisation between the elite and non-elite becomes more and more apparent. This has been a subject of criticism by various Indian dispensations which have contributed to the commercialisation of education, putting in peril the public educational institutions, this has been accompanied by a shrinking public expenditure on education on the part of the central governments over the years. Globalisation has led to a shift in focus from traditional and cultural education to more emphasis on scientific and technological education.

A rather unhealthy impact of globalisation has been the growing preference for the STEM (Science, Technology, Engineering and Management) fields, this is evident by the fact that the average Indian family’s mindset lies in according primacy to these fields at the expense of other social science and liberal arts fields, particularly moral and value education.

However, there is still a silver lining, distance education and virtual institutions, that is commonly regarded to be an industrialised form of education, are now taking place in India, which is proving to be more cost-effective and with the fast-growing information and communication technology, the availability and flow of academic resource materials are providing input to the academicians to compete with their counterparts anywhere in the world.


Globalisation is an all-encompassing phenomenon that has changed the very shape of not just Indian but also global society and institutions. It has led to the birth of institutions like the World Trade Organisation (WTO), International Criminal Court (ICC) etc. It has led to the democratisation of public opinion and beliefs via the spread of information technology’s most instrumental tool-social media, globalisation has sparked revolutions in different regions like the Arab Spring in 2011.

Therefore, India has and will continue to influence and be influenced by globalisation, while a brief de-globalisation sentiment arose in the aftermath of the supply chain disruption caused by the COVID-19 pandemic, there is no alternative to globalisation, it is in this context that the Indian notion of aatmanirbharta must be in sync with globalisation and must promote, not go against it.




–The writer is currently working as a Research Associate at Defence Research and Studies ( and is a columnist. The views expressed are personal and do not necessarily reflect the views of Raksha Anirveda