Revision: Economics (Understanding Economic Development) >> Globalisation and the Indian Economy Social Science English Medium Class 10 CBSE

Integration of national economies and societies through cross-country flows of information, ideas, technologies, goods, services, capital, finance, and people.

Removing barriers or restrictions set by the government is what is known as liberalisation.

A multinational corporation is a company that owns or controls production in more than one nation.

The money that is spent to buy assets such as land, buildings, machines, and other equipment is called investment.

Investment made by MNCs is called foreign investment.

Globalisation is the process of rapid integration or interconnection between countries.

• Globalisation means integrating a country’s economy with the world economy and treating the world as one single market.
• It involves free flow of goods, services, capital, technology, information, and people across national borders.
• Globalisation goes beyond trade and includes worldwide coordination in production, marketing, finance, and human resources.
• It increases economic integration and interdependence among countries.
• A global company views the entire world as one market and does not differentiate between domestic and foreign markets.
• Globalisation promotes free-market competition and benefits businesses and consumers, but also increases dependence among nations.
• Outsourcing is a result of globalisation, where foreign companies hire Indian firms for services like IT and BPO due to low cost and skilled labour.

• WTO (1995) replaced GATT (1948) to create a rule‑based global trading system and reduce arbitrary trade barriers.
• Aims: expand trade in goods and services, ensure efficient resource use, and protect the environment.
• Promotes removal of tariffs and non‑tariff barriers and more market access for member countries.
• India has reduced tariffs and removed quantitative restrictions as per its commitments and argues for developing countries’ interests.
• Criticism: benefits mainly developed nations, and developing countries feel pressured to open markets while rich countries retain protections, especially in agriculture.

• The World Trade Organisation (WTO) aims to liberalise international trade by removing trade barriers.
• WTO sets rules for international trade and ensures that member countries follow them.
• About 160 countries of the world are members of the WTO.
• Developed countries often continue to support their farmers through subsidies despite WTO rules.
• Developing countries argue that such practices are unfair and harm their farmers and economies.

• Globalisation has increased competition, creating serious challenges for small producers.
• Removal of import restrictions has allowed cheaper foreign goods to enter Indian markets.
• Small producers find it difficult to compete with large multinational companies.
• Many small industries have reduced production or closed down due to rising competition.
• Loss of small industries has led to unemployment among workers dependent on them.

• Consumers today have a wide choice of goods and services.
• Modern products from global companies are easily available in India.
• Indian markets now offer many brands and models of the same product.
• Earlier, such a wide variety of goods was not available in Indian markets.
• Indian markets have changed rapidly in a short period of time.

• Earlier, production was mainly organised within countries, and trade connected different nations.
• Multinational Corporations (MNCs) control production in more than one country.
• MNCs spread production across countries to reduce costs and increase profits.
• Different stages of production are carried out in different countries based on advantages like cheap labour and skills.
• This global spread of production makes the process complex but highly beneficial for MNCs.

• Multinational Corporations (MNCs) set up production in countries where labour is cheap, skills are available, and markets are nearby.
• Money spent by MNCs on land, buildings, and machines is called foreign investment.
• MNCs often buy local companies or jointly produce with them to expand production.
• Large MNCs control production by placing orders with many small producers in different countries.
• As a result, production in different countries becomes closely connected and interlinked.

• Rapid improvement in technology has been a major factor in promoting globalisation.
• Better transport technology has reduced the cost and time of moving goods over long distances.
• The use of containers has made handling and shipping of goods easier and cheaper.
• Advances in information and communication technology allow instant sharing of information worldwide.
• Information technology has helped spread the production of goods and services across countries.

• Globalisation refers to the rapid integration and interconnection of countries.
• It has increased foreign trade and foreign investment across the world.
• Multinational Corporations (MNCs) play a major role in the process of globalisation.
• Goods, services, technology, and investments now move more easily between countries.
• Due to globalisation, markets and production across countries have become closely linked.

• Globalisation has increased competition and made jobs less secure for workers.
• Employers prefer flexible and temporary workers instead of permanent employees.
• Workers often face low wages, long working hours, and pressure to do overtime.
• Many workers are denied benefits such as health insurance, paid leave, and job security.
• Conditions of workers in the organised sector are becoming similar to those in the unorganised sector.

• Foreign trade has long been the main link connecting different countries.
• It allows producers to sell their goods beyond domestic markets to other countries.
• Foreign trade increases the choice of goods available to consumers.
• Imported goods create competition, often leading to lower prices and better quality.
• Foreign trade connects markets of different countries and leads to the integration of markets.

• Taxes and restrictions on imports are used by governments as trade barriers.
• High import taxes make foreign goods expensive and protect domestic producers.
• After Independence, India restricted imports to protect its industries from foreign competition.
• From 1991 onwards, India removed many trade and investment barriers to improve competitiveness.
• The removal of trade restrictions by the government is called liberalisation.