Citation:

Aparna Gangadharan, Dr. Archana Fulwari. "Developing A New Composite Index of Globalization for the Indian Economy" International Research Journal of Economics and Management Studies, Vol. 2, No. 4, pp. 607-615, 2023.

Abstract:

Globalization is a powerful tool for bringing about a big shift in terms of the opening up of economies. It is a process of growing interdependence between economies and is a multifaceted concept encompassing economic, financial, political, technological, social, cultural, legal and environmental dimensions. Over a period of time, the Indian economy has become increasingly globalized in several dimensions. With the limited success of the planning approach, and with the built-up of adverse situations in the domestic economy and poor performance on the external front, the government introduced a gradual phase of liberalization from the mid-1980s onwards, relaxing the industrial licensing system, promoting foreign trade, and permitting equity capital investment, while relaxing exchange controls and restrictions. Under the compulsions arising out of the balance of payments crisis in 1990-91, the government adopted the policy of liberalization, globalization, and privatization, shaping the economy after that. While many sectoral studies have been undertaken, few studies were found that carried out a macroeconomy-level analysis of the extent and depth of globalization of the Indian economy over three decades since reforms were initiated. The present study attempted to gauge the globalization of the Indian economy in its varied dimensions using the methodology of a composite index developed by KOF. The index comprised 31 indicators across different dimensions of globalization. Principal component analysis was used to weigh the indicators and aggregate the composite index of globalization.

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Keywords:

Globalization Index, Economic Globalization, Financial Globalization, Political Globalization, Technological Globalization, Social Globalization.