Table of contentsIntroductionGlobalization in IndiaConclusionThe report gives an idea of ​​how nationalism and protectionism can affect the positive and negative well-being of the country. This happened after the 2008 financial crisis in the United States. The report gives a brief idea about the advent of the global financial crisis in 2008 and how it affected each country due to globalization. The country chosen for the project is India. This report provides insights into the impact of the crisis on India and outlines the pros and cons of globalization in the Indian economy as well as the challenges Indian businesses face due to rising nationalism and protectionism. A solution is also given to know whether nationalism and protectionism should be there or not. Say no to plagiarism. Get a tailor-made essay on “Why Violent Video Games Should Not Be Banned”? Get the original essayIntroductionThe global financial crisis is considered the worst financial crisis after the Great Depression of the 1930s. It all started with subprime mortgages, where brokers began providing lower-cost loans to those who did not didn't want it. It has been studied that this started with the Gramm Leach Bliley Act of 1999, where the FED reserves lowered interest from 6.5% to 1% in 2003. This motivated to break down the wall between commercial banking, investment banking and insurance. The commercial bank and the investment bank merged and the investments began issuing collateralized debt obligations (CDOs) to foreign companies and countries. Secured debt obligation can be defined as adding more mortgage documents. Faced with growing demand for CDOs, the investment bank asked the commercial bank to provide a larger number of mortgage-backed securities. Then the commercial banks asked the brokers to attract more customers, and eventually they had defaulters and subprime loans who could not afford the loan, which forced the banks to acquire the houses of those who cannot afford to pay the loans, resulting in NPA. Countries are losing their money in investment banks. The first financial institution to be affected was Lehman Brothers. Impact on India Over the last three decades, the Indian economy has performed very well, reflected in a growth rate of real gross domestic product (GDP), domestic savings and a increased investment and productivity. However, the epicenter of the economic crisis has been the US subprime mortgage market, as explained previously; its impact was felt all over the world, on the financial market. At first the government denied any impact on the Indian economy, then it showed this impact and was recognized by the Indian government. Although the impact was very less on India compared to other countries, due to the strong fundamentals of the Indian economy, well-regulated banking system and less exposure of the financial sector to the global financial market. The collapse of the United States did not lead to a credit crunch in India. economic, but the credit crisis in the United States caused panic in India. With the growth of the Indian economy, the global financial crisis has forced the Indian economy to face slowdown, double-digit inflation, slowing industrial growth, widening current account deficit, etc. . Through distinct channels such as the financial market, trade flows,import-export. and exchange rates, the global crisis has affected the health of several sectors of the Indian economy. The largest impact was on the mining and manufacturing sector during 2007-08. This happened due to the decline in exports, particularly clothing exports, and Indian demand for iron ore. Despite this, the Indian economy maintained an impressive growth rate of 9.2 percent in 2007-08. However, the Indian economy could not withstand the impact of the global crisis beyond 2007-08. In 2008-09, GDP growth rates declined in almost all sectors except a few. As a result, GDP only grew by 6.7% later that year. However, in 2009-10, India recovered and GDP grew by 7.2 percent, but the agriculture sector could not bear the impact. The effect of the financial crisis on India's external sector can be analyzed through the balance of payments. BOP is the sum of current account, capital account, foreign exchange reserves and errors and omissions. The balance of payments summary gives a clear picture of the country's overall performance in the external sector. However, during the period 2008-09, the overall balance of payments turned negative, that is, it fell to (-20080) million dollars. This shows that the crisis has seriously affected the inflow of capital into the country. However, it was only revived to a positive value in 2009-10. In the current global scenario, India is considered the most promising and fastest growing economy, standing at 6th position in the world. Due to liberalized foreign direct investment (FDI) rules in the Indian economy, the real estate, telecom, construction and power sectors have become very attractive investment avenues for domestic and foreign investors. Globalization in India Globalization is the expansion of economic activities across India. the political boundaries of the nation. This results in the economic growth of a nation and interdependence between two nations. Benefits of Globalization in India Globalization has helped multinational companies to get several jobs in Hyderabad, Bangalore, etc. The benefits of globalization can be summarized as follows: Increased employment: New jobs naturally lead to more commitments and employment (Mohapatra, 2007). Various supports are provided by the government, such as Special Economic Zones (SEZs), Export Processing Zones (EPZs), etc., to hire staff. As the labor rate is cheaper in India, countries like USA and UK outsource their work to Indian companies. This creates more jobs. Increase in remuneration: The level of remuneration has been higher than what national companies of the world have provided at a similar level of qualification and professional experience. According to Wharton (2011), mergers and acquisitions are increasing due to globalization. Improved standard of living and increased purchasing power: A huge generation of wealth is taking place, which leads to the development of businesses and cities are growing with higher purchasing power. Cities are experiencing a better standard of living and also an increase in economic growth of businesses. Empowered Indian Youth: The pride of working in a multinational organization has increased among young professionals and this has worked wonders in increasing their exceptional confidence in the early 20s, which is not seen in any other group of age. This phenomenon with professionalism gave a strongmotivation to the Indian economy. The growth of the commercial and residential real estate sector has expanded significantly. Some disadvantages affect the industrial sector and the growth of the economy. Increased likelihood of economic disruption in a country affecting all nations. Corporate influence extends far beyond civil society and average individuals. Threat of control of global media by a handful of companies, limiting cultural expressions. Greater risk of unintentional transport of diseases between nations. International bodies like the World Trade Organization undermine national and individual sovereignty. Increased risk of civil war and open warfare between developing countries as they compete for resources. Declining environmental integrity as polluting companies take advantage of weak regulatory rules in developing countries. In the process of protectionism and nationalism, the government imposes additional duties and taxes on foreign companies, implementing various tariff and non-tariff barriers on foreign companies. the products. This is done to increase the price of the products so that the government can indirectly promote the nationalism of its country and motivate the national company to sell the products throughout the country. This will have a positive effect on the market and increase their market share. Regarding protectionism, the government takes various measures to promote the national product. This is the practice followed by the government. In India, it is followed by the government. The tax rate, i.e. income tax for domestic companies, is lower than for foreign companies. The tax rate for domestic companies is 30%. The current scenario indicates that in the Indian market, most of the products are sourced from foreign companies and are imported. India is the preferred market for companies around the world to sell their products as the country is highly populated. This leads to competition in the Indian market, making it difficult for domestic companies to sell their products. Protectionism is important for India to promote its local products in the market. But in the current scenario, India has become a global market with many policies implemented by the government like Make in India. However, protectionism is a beneficial policy in the short term. The development of nationalism will also lead to factors such as the advent of war, socio-economic cliques, etc. Protectionism creates jobs in the internal market; not allowing the foreigner to intervene and promote the national product will not be of any use in the long term. India has to import certain products from the foreign market. Globalization also plays an important role as Indian products need to be sold abroad in order to increase the profitability of a company. However, if businesses want to explore the foreign market, the government cannot limit itself to importing goods but can slow down for the time being in order to manage the domestic market. Increased protectionism and nationalism will limit FDI and the influx of foreigners. money. As stated above, how important it is for India to have money inflows, the government, on the contrary, would not want to restrict FDI and money inflows. Research has shown that growing protectionism and nationalism in developed countries are facing problems of unemployment and low wages due to the lower cost of doing business in low-wage countries like China. The other argument is based on the fact that most companiesspeak to their domestic audiences while crafting economic policies through a mix of subsidies and quotas to bolster trade. All this therefore leads to a growing trade deficit for developed countries and higher wages. Another important problem resulting from protectionism is trade wars due to which all countries increase tariffs and lead to a decrease in the volume of world trade. India stands for protectionism and nationalism with many conservative politicians like Donald Trump coming to power through job creation for the American market. This affects India in the field of education, employment, technology and trade. According to a study, India's growth could be affected by 1.2% if the country increases protectionism. Many Western countries say Indian tech companies have suppressed the work of their citizens. As a result, technology companies like Infosys, TCS, Wipro, etc., whose bulk of business is generated in the US, have announced that they will hire US citizens in the next two years. But the policy targets the H1 B work visa program, which allowed hiring cheap labor from countries like India. However, the IMF has already sounded the alarm by ordering that developing countries like India, China and South Africa will gain or lose the most, posing a risk to financial stability of these savings and capital outflows which further harm demand. The Indian IT sector's revenue comes from US customers. The top 5 players in India account for 46% of the IT sector's revenue, with the revenue contribution being around 58%. It is also estimated that 30% of the sector's revenue comes from financial services. If we talk about the qualitative point of view, the activities of the financial sector are well established and have a significant impact. After the global financial crisis, American BFSI players created significant outsourcing shares and enabled Indian players to learn from their experience, negotiate aggressively on prices, lobby for commitments in service level and be rewarded with more work. Thus, between 1999 and 2008, the share of American financial services as a % of the total turnover of the 3 main Indian players increased from 25/5 to 38%. Indian companies were flexible, offered good quality and were a key lever in management. their SG&A and time to market by freeing up more IT resources. Ironically, this crisis would have had a more serious impact if Indian businesses had established much closer partnerships with financial services entities, linking invoices to customers' business resources. A Forrester study reveals that 43% of Western companies are reducing their expenses. their IT spending and nearly 30% are reviewing their IT projects to get better returns. The slowdown in the US economy has seen 70 percent of companies negotiate with suppliers and almost 60 percent have reduced their contracts due to the economic downturn. With such an impact on the economy, American companies are reducing their budget for IT sectors; more than 40% of them plan to increase their use of offshore suppliers. Merger activity will increasingly provide new outsourcing opportunities, Infy confirmed, as newly merged entities may need to seek new suppliers to.