Today, in terms of the potential benefits of globalisation, India is in a very different position than would have been the case 50 or even 20 years ago. This is because the sources of what economists call “comparative advantage” have changed dramatically in India’s favour in the 1990s because of the technological revolution.
In the old days, comparative advantage was largely determined by “factor endowments”, i.e. land, labour and capital. Geographical location and early starts in industry also conferred greater advantages. Thus, at one time, a country’s trade pattern, was determined by its natural resources and the productivity of its land.