Evaluate 2 aspects of effect of globalization in India in the last 5 Essay

Evaluate 2 aspects of effect of globalization in India in the last 5 years - Essay Example FDI has tremendous impact in economic development of India. Among the emerging economies, India offers the most liberal and transparent policies on FDI investments. The following table shows how FDI inflows from different countries flew to India. The maximum impact of FDI has taken place in service sector which at 21% includes financial sector, information technology, and travel business. Computer software and hardware businesses are next in the line contributing around 9%. Telecommunication sector has grown rapidly in India due to huge contributions by FDI. There is no surprise that Indian telecom industry which is growing at the rate of 45% has the highest growth rate found in the world. (Chaturvedi, Ila 2011) Indias growth story and FDI has direct linkages. Ratio of FDI Inflow to Gross Capital Formation rose to 9.6 percent in the year 2008, which was found to be only 1.9 percent during 1999-2000. In the same way, ratio of FDI Outflow to Gross Capital Formation went to 4.1 percent in the year 2008 which was ruling at only 0.1 percent during 1999-2000. (Ansari, Shamim 2010) India has been one of the most lucrative destinations for investment in the service sector for its competitive wages and due to huge demand and supply gaps in the sectors like insurance, banking, telecommunication and financial services. India has become a hub for back-office processing, medical transcription services, call centres, knowledge process outsourcing and back office accounting and financial services apart many other services including software and information technology business. The Indias average quarterly Gross Domestic Product Growth rate averaged 8.4 between 2005 and 2010 that reached at its pinnacle in September, 2006. This growth rate should be seen at the back drop of previous growth rates that prevailed around 5.5 percent before 2005. Globalisation means opening up of markets for