Globalization in India had a favorable impact on the overall growth rate of the economy. The pickup in GDP growth has helped improve India’s global position from the 8th position in 1991 to 4th place in 2001.
During 1991-92, the Indian economy grew by 0.9% only. However the Gross Domestic Product (GDP) growth accelerated to 5.3 % in 1992-93, and 6.2% 1993-94. A growth rate of above 8% was an achievement by the Indian economy during the year 2003-04.
(i) Structure of the Economy
Due to globalisation, not only the GDP has increased but also the direction of growth in the sectors has also been changed. Earlier the maximum part of the GDP in the economy was generated from the primary sector but now the service industry is devoting the maximum part of the GDP.
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The services sector remains the growth driver of the economy with a contribution of more than 57 per cent of GDP. India is ranked 18th among the world’s leading exporters of services with a share of 1.3 per cent in world exports.
The services sector is expected to benefit from the ongoing liberalisation of the foreign investment regime into the sector. Software and the ITES-BPO sectors have recorded an exponential growth in recent years. FDI increased from around US$ 100 million in 1990/91 to USD 5536 million in 2004-5.
(ii) India’s imports in 2004-05 stood at US$ 107 billion recording an increase of 35.62 per cent compared with US$ 79 billion in the previous fiscal. Export also increased by 24 per cent as compared to previous year.
It stood at US$ 79 billion in 2004-05 compared with US$ 63 billion in the previous year. Oil imports zoomed by 19 per cent with the import bill being US$ 29.08 billion against USD 20.59 billion in the corresponding period last year. Non-oil imports during 2004-05 are estimated at USD 77.036 billion, which is 33.62 per cent hig’ier than previous year’s imports of US$ 57.651 billion in 2003-04.