Impact of globalization on Indian Capital markets Essay

concern of globalization on Indian Capital markets - Essay ExampleThe paper tells that the stock markets in the growth economies same India account for a significant share of the activities in the global markets. Lowering the barriers relating to the flow of internationalistic capital in the post liberalization period has enhanced the stock market liquidity. Liquidity plays an weighty role in spurring the long term growth opportunities. In the absence of liquidity numerous profitable opportunities had to be foregone as people were unwilling to block their funds for long bracing of time. The increased liquidity in the Indian capital markets has been facilitated through foreign participation in the defecate of equity. Increased capital flows in the inelegant have helped in improving the production base of the country. By way of this the total savings is distributed across countries with high potential that lack the necessary financial back-up. As a result of globalization the economic progress of a country is not affected by fund constraints. Studies have shown that an active capital market complemented by a sound banking system cause economic growth. The foreign participation in a country can take various forms like foreign institutional enthronisation or foreign direct investment. In India the bulk of the foreign investment is in the form of foreign portfolio investment. The growth rate in GDP is an important indicator of the tinct of the strengthened capital markets and stable financial system. The GDP growth rate of India has increased from the lows to the extent that the country ranks among the fastest growing nations in the world.