2.4   Globalization in India

In India the period after - was marked by severe balance of payment difficulties mainly due to hike in oil price and Gulf war in - and hostilities in West Asia. When the new government took over in June . India had unprecedented balance of payment crisis. With the downgrading of India’s credit rating by some international agencies, there was heavy flight of capital out of India.

Since India lost its credit worthiness in the international market, the government mortgaged tons of gold to the Bank of England. Under these circumstances, the government for - presented its budget in July with a series of policy changes which underlined globalization, liberalization and privatization. This has come to be called as India’s new economic policy. These policies were strengthened when India signed the Dunkel Draft in .

Reforms made to adopt Globalization:- (New Economic policy in India) . Abolition of Industrial licensing, except for a few industries. . Reduction in the number of industries reserved for public sector.

. Fixation of a realistic exchange rate of rupee to exchange exports of Indian goods.