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INDIAS WAY FORWARD

Globalization and World Economy

Every man lives by exchanging .. Adam Smith

Globalization is the process by which businesses or other organizations

develop international influence or start operating on an international scale.
The state of the nations participating in the production and consumption of
goods and services and money supply.
Present time is the era of modern trade and Globalization .

Introduction

The global economy continued to expand during 2014 at a moderate and

uneven pace
Global recovery was also hampered by some new challenges, including a
number of unexpected shocks, such as the heightened geopolitical
conflicts in various areas of the world. Growth of world gross product
(WGP) is estimated to be 2.6 percent in 2014
The world economy enters 2015 at a fork in the road. One track leads to
the self-sustaining vigorous recovery that policy makers have sought in
vain ever since the financial crisis erupted in 2007.
Many Economic downturns in the rapid growth of trade and industry can
be summed up in a nutshell of global economic challenges.

Global Economy Some Long Term Challenges

Global Financial Crisis
Six years after the global financial crisis, the world
economy still looks as unstable, unbalanced,
uncoordinated and ultimately unsustainable as
ever. Almost everywhere is mired in its own
particular form of economic unhappiness.
Global Inequality and Unequal Economic
development
Income inequality and wealth concentration
hinders growth in the long run.
Global Poverty Issue
Poverty reduction is a major goal and issue for
many international organizations such as the
United Nations and the World Bank. The World
Bank estimated 1.29 billion people were living in
absolute poverty in 2008.

Why Go Global?

The need to capture New Markets

The need to expand capabilities and assets

The need to expand product and service portfolio

The pressures of domestic competition

The 21st Century Company

Flatter Management Hierarchies

Joint ventures and partnerships

Aim for global product and scale economies

Dont centralize research/design/produce where best

Be ready to move on

Looking forward towards 2050

BRICs economies would overtake each of these G-6 economies
India might have growth rates higher than BRIC Countries
total output in India and the US would be roughly equal

Reason

for Growth

population size is large and income levels are low

high proportion of young people in the population
wages are significantly lower than in the world outside
emerging technological capabilities have the potential to support
productivity increase

TRADE CLASSIFICATION IN BRICS

An Integrated approach
Growth

through Export

E-Commerce and Global Value Chains

enhancing exports from Micro Small and Medium Enterprises (MSME)

attract more Foreign Direct Investment (FDI), and increase productivity

Agriculture-led

Growth:

Productivity improvements including agricultural extension, research and development,

and crop diversification, bringing in larger areas under irrigation, agricultural exports
rural infrastructure

Rural industrialization - agro-based industries

Improving primary health care and school facilities

Strengthening of IT

Second Green House

Conclusions & Key Takeaways

India, Given its size and its profile in the global economy, will inevitably need to
play an active role at global level

On Capability front, India has the capability to push its manufacturing

contribution to GDP to 25% on sustainable basis by 2025.

Government has to act as the central pivot of aligning industries, private

companies, public sectors

The Government of India has taken a number of steps to further encourage

investment and improve business climate.

India's expanding economy offers equal investment opportunities to domestic

entrepreneurs and international players.

Indian Manufacturing is slowly but surely sweeping back in the international

economic space.