Globalisation refers to a borderless economy having a free flow of goods and services, capital, labour, technology, etc. In other words, it means integrating the economy of a country with the world economy.

Globalisation has helped the economy to increase foreign exchange reserve in the following ways:

• Encouragement to Foreign Capital: Due to globalisation, foreign investors were allowed to invest in Indian companies. Thus, foreign capital started flowing into various sectors of the economy. This led to an increase in the earnings of foreign currency. 
• Convertibility of Rupee: Due to globalisation and new economic policy, Rupee was made fully convertible ‘ into all current account transactions. This made foreign transactions easy and hence, the foreign currency started flowing into our economy. 
• Foreign Collaboration: Due to liberalization and globalisation, any trade was possible throughout the world. Indian companies made foreign collaboration to increase their business. This led to the flow of foreign exchange currency in India. E.g. Maruti-Suzuki, Hero Honda, etc. 
• Encouragement to Export: Due to the introduction of the Exim Policy, various incentives were allowed to exporters which made exporters do business on a larger scale. This increased India’s export and foreign exchange currency reserves. Thus to conclude, globalisation has overall encouraged to increase the foreign exchange reserves.