S SOCIAL SCIENTIST the 1990s. A World Bank—IMF consensus has emerged on the paradigm of the so-called structural adjustment which has to be followed by the states which approach Bank-IMF for assistance for development and fiscal stabilisation. The new conditionalities which the Bank and IMF have evolved have a definite ideological approach based on the philosophy of free market economy and retreat of the state from its central role in the productive system of the country. This, discussion of new global developments of the 1990s will be incomplete without highlighting some significant developments with the advanced industrial countries of the West. The advanced industrial countries are rearranging and restructuring relationships among themselves because the United States of America has ceased to be the leader of global industrial economy and Germany and Japan have emerged as important centres of industrial economy. The first attempt to work together was made in 1980s by the so-called G7 countries of USA, Japan, Germany, UK, France, Italy and Canada, The 1990s have witnessed the marginalisation of the cooperation among the G7 countries and in its place have emerged powerful 'trading blocs'. The European Union of fifteen countries, the North American Free Trade Area (NAFTA) of USA, Canada and Mexico; the Association of South East Asians, the Asia-Pacific Economic Cooperation Forum (APEC) are new groupings in search of 'free trade' among themselves. If on the one hand globalisation of production and services is a growing reality, on the other, emergence of 'trading blocs' is the other side of this new global reality of the 1990s. Foreign Direct Investment in the Complex productive systems of Third World countries is a new reality of the 1990s. Michel Hansenne, Director General of the ILO, while releasing a Report on World Employment (1995) observed that: 'In the eighties about 80 per cent of the FDI flowed to developed countries. It has changed. In 1992, the share of the developing countries in FDI flow rose to 30 per cent as against an average of 24 per cent during the 1970s. It increased further to 40 per cent in 1993'. The ILO Report (1995) further states that 'If present trends continue, annual flows of FDI into the Third World would, in the medium term, exceed those into the developed world. This would represent a major structural shift in the pattern, not just of investment, but also of the production and trade that arise from it'.3 Thus the UNCTAD Report of 1994 and the ILO Report of 1995 have clearly brought out the salient features of the changing role of global capital in the 1990s, and their impact on the economic policies and productive systems of the developing countries including India. It may be mentioned here that the Transnational Corporations or other foreign investors from the advanced industrial countries will decide their own priority areas for making investments in India. The Finance Capital of the United States is interested inxthe Indian market in service sector