Meaning and Forms of Globalization

Meaning and Forms of Globalization

Globalisation means the interaction and integration of the domestic economy with the rest of the world with regard to foreign investment, trade, production and financial matters. It is the process by which businesses or other organizations develop international influence or start operating on an international scale. Globalization stands for the consolidation of the various economies of the world.

GLOBALISATION

Globalization results from the removal of barriers between national economies to encourage the flow of goods, services, capital, and labour. While the lowering or removal of tariffs and quotas that restrict free and open trade among nations has helped globalize the world economy.

Forms of Globalization

(a) Foreign trade policy: India has signed a number of agreements in order to expand Indian trade worldwide. Some of the agreement includes TRIPS (Trade Related Intellectual Property Rights), GATS (General Agreement on Trade in Service).

(b) Export promotion: Globalisation promotes export by reducing quotes and tariffs, by eliminating trade restrictions and by simplifying trade procedures.

(c) Freedom to repatriate: Repatriate means, to send or bring money back to one’s own country. Since globalisation has integrated many countries, repatriation has become very easy.

(d) Reduction in tariffs: Custom duties and tariffs imposed on imports and exports are reduced gradually to make Indian economy attractive to the global investors.

(e) Encouraging open competition: Globalisation brings an end to the difference between domestic and international markets. Domestic companies start their operations in the international level and therefore there is an open competition.