Disclosed herein is a method for global motion estimation for video stabilization. The method enables selecting a video frame from a video stream. The method further enables downscaling the video frames by factor close to 2 in a two dimensional range, dividing the downscaled video frame into a plurality of macroblocks, performing motion estimation for the macroblocks to generate a set of local motion vectors. Further, the method enables selecting macroblocks representing global motion vectors from the set of local motion vectors, computing a single global motion vector for the selected macroblocks and determining occurrence of at least one of: scene change, illumination change or crossing object and modifying the single global vector to compensate for errors induced due to occurrence of at least one of: scene change, illumination change or crossing object.