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Original Article | Volume 2 Issue 4 (ACR, 2025) | Pages 996 - 1009
Globalization and Its Impact on Indian Manufacturing Sector and Economy
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1
Associate Professor, Department of Management, Birla Institute of Technology, Mesra, Patna Campus.
2
Department of Global Economies and Finance Cluster, School of Business
3
Visiting Professor, L. N. Mishra Institute of Economic Development and Social Change, Patna.
4
Professor, Vivekanand Education Society's Institute of Management Studies and Research
Under a Creative Commons license
Open Access
Abstract

Globalization, characterized by the increasing interconnectedness of economies through trade, investment, and technology, has profoundly influenced India since the early 1990s. Following the economic liberalization reforms of 1991, India embraced globalization to integrate more closely with the global economy. This shift brought significant transformations in the country’s economic landscape, especially within its manufacturing sector. The inflow of foreign direct investment (FDI), expansion of export-oriented industries, and adoption of advanced technologies have contributed to economic growth and industrial development. However, these benefits have also been accompanied by challenges such as increased competition for domestic producers, job displacement in traditional industries, and widening regional disparities. The study critically examines the multifaceted impact of globalization on India's economy with specific focus on the manufacturing sector, analysing both its opportunities and constraints. This study also investigates the impact of globalization indicators—foreign direct investment (FDI) inflows, trade openness, and industrial employment—on manufacturing value added across five major emerging economies: India, China, Brazil, Indonesia, and South Africa. Utilizing panel data from 1990 to 2024, the study applied an OLS regression model with country dummies to approximate fixed effects. The results show that exports and industrial employment are positively associated with manufacturing performance, while imports and FDI inflows exhibit significant negative effects. The findings emphasize the importance of a balanced globalization strategy, tailored to domestic industrial capacity and labour dynamics

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