India case study globalisation

  • Created by: courteny
  • Created on: 08-03-17 18:38

India: a third generation NIC lead by the service sector

Unlike the other emerging asian economies, recent transformations in the Indian economy has been based more on the service sector than on the mamnufacutring growth which occured in countries such as Taiwan, South Korea  and Malayasia.

With in excess of one billion people, India has the second largest population in the world. In terms of purchasing power parity  India is now the world’s fourth-largest economy, although it is further down the global league table under the traditional method of calculating GDP. India is the ‘I’ in BRIC, the new buzzword for the economies tipped for rapid growth: Brazil, Russia, India and China. However, even with 17% of the world’s people, India still only accounts for 1% of world trade.

Untill recenty there has been fairly low level of Foreign direct investment (FDI) in the Indian manufacturing sector. It is the service sector that has been the main engine of economic growth.Services accounted for around 50% of GDP at the begining of the 21st century. 

Indias grestest advantage lies in the number of highly qualified proffesionals in its workforce whise skills are in demand in many areas across the english speaking world. this has resulted in a great deal of outsourcing of work from developed countries to Indian compaines, particularly those operating in software and IT industries.other sectors which have shown large growth include media, retialing, financial services, entertainment, advertising and tourism.

this growth, though, has mainly been of benefit  due to the english speaking middle classes and certain areas of South India. the primary sector still dominates the country in terms of employment, with around 70% of its popluation still engaging in agriculture and other primary activities. much of the famring is subsistence level which accounts for the very high degree of rural poverty.

Outsourcing of work to India form developed countries began with software development, but rpaidly progressed to call centers and a wide range of buisness services. this led to the outsourcing of the administration and maintainance of overseas firms through ICT systems. Indias advantage in the respect was based upon:

  • a large englsih speaking workforce estimated to be over 50 million
  • much lower labour costs one source estimated for every 1000 jobs relocated to india, a british company would save 10 million pounds 
  • the fact that many devleoped countries had significant ICT skills shortages 


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