Negative impacts of Globalization on the industry are:
1. Certain sectors that were already well established when opened to foreign investment led to exploitation of their resources by dominating MNCs and stifle their own R and D efforts.
2. Use of foreign technology may not be adaptable to Indian conditions. Sometimes MNCs deliberately use less sophisticated technology in their subsidiaries.
3. There’s excessive competition in the market that puts too much pressure on domestic companies to raise productivity, improve product quality etc.
4. Rising urban industrial wages are much higher than rural wages, which leads to disparity in incomes.
5. There’s uncontrolled growth of consumerism and the problem of plenty as a consumer has lot of choice. Businesses are solely motivated by private profits. Globalization has in fact raised capital intensity in production and this has affected employment adversely as labour has been replaced by machine.
6. Globalization has exposed domestic firms to risks such as fluctuations in prices, instability of profits and uncertainties of demand and supply.