I

-
r

'

,
 Multinational corporations
-

Interlinking Products Across countries

-
FDI
-

Partnerships / Joint Venture

-

local companies 1 Mergers / Takeovers

-

Contract to local companies

foreign Trade
trade helps in integration ?
w
foreign
Globalisation and
The Indian Economy
Globalisation
-

Globalisation and Migration

-

Trade Barrier
New Economic Policy 1991
It liberalisation
-

Impact of Globalisation in India

-

Positive Effect
-

Negative effect

How Globalisation can be made fair ?

 ①

Multinational corporations (MNCs)

°
A MNC is a
nation .
company
that owns or controls production in more than one

°
MNCs set up offices and factories for production in regions where they can
labour and other resources
get cheap .

°
This is done so that the cost of production is low fat most 50 -

60% ) and MNCs

can earn greater profits .

MNCs not
only sell its finished products globally but also the goods and services
°

are produced
globally .

: An American
company manufactures its product in China , sells it in Europe and
°

eg
-

,
its call centre is in India .

#
Interlinking Production Across countries : lcbse 20177
MNCs link the production process of different countries Some ways of .

interlinking
production across countries are :

o
foreign Direct Investment (FDI) Investment made by a company based:
in our
country ( usually an MNC ) into a company based in another country
,
.

°
Partnerships / Joint MNCs setup production unit jointly with some of the
Venture :

local companies of that region Local companies get new technology and money to
.

expand their factory from this partnership .

° local companies / Mergers / Takeover The most common route for :

MNC is to
buy up
local companies and then expand production .

o
contracts to local companiesMNCs place order for production with many small
:

producers . MNCs then receives the product and sell it under their brand name .

Foreign Trade

foreign trade is a trade between different countries of the world . It is also

called international trade , external trade or inter regional trade -
.

Foreign trade helps in the integration of Markes as I close 2018,20157 :

°
It facilitate movement of goods and services between countries .

°
It facilitate movement of people , ideas and technology .

It
gives opportunity to producers to reach beyond local / domestic markets
°
.

Increases competition , overall reduction in the price of

goods
°
.
 ②

Globalisation
Globalisation is the
process of rapid integration or interconnection between
countries .
More and more
goods and services , investment and technology is
between countries
moving .

# Globalisation and migration :

factors that helped globalisation led

are (Cbse -

2020,2019 )
°
Development in transportation has to cheap quick delivery of goods over

long distances Eg : Trains ships highways etc

.
-

, ,
.

°
Information and communication Technology (ICT or IT) has revolutionised the
spreading of production of services across the globe .

New
technologies like e banking telephones fax , internet has made
communication and
-

, ,

payments easy for businesses .

and removed trade

In 1991 the Indian made in policies
government changes
°
,
barriers to a large extent .

# Trade Barrier :

°
Government puts restrictions to control the foreign trade ,
these restrictions
are called trade barrier Eg : Tax on imports
.
-

etc .

° All developed countries , during the early stage of development have given
protection to domestic producers through trade barriers .

quality of goods
'
way of restriction on volume or
'
°

Similarly Quotas are a

to be
imported or exported .

4313 New Economic Around 1991 , it was felt that Indian producers must
Policy 1991 : '

compete with producers around the globe , so that they can improve their
performance and quality of goods and services That's why Government of .

India in 1991 made some major changes in its trade policy .

° When government removes trade barriers , it is known as Liberalisation .

World Trade Organisation ( WTO)

whose aim is to liberal lose international trade
It its an
organisationcountries
started by developed
.
It was

nearly
now of WTO But
164 countries are member -

,
it is seen that the developed countries have
unfairly retained trade barriers
while on other hand WTO toCes developing countries to remove trade barriers .

Impact of Globalisation on India

POSITIVE IMPACTS : ( Cbse 2018 , 2017 ; 20153
MNCs started investing in India and with time they increased investment as

investing in India had been beneficial for them .

 ③

°
Top indian companies raised their production standards due to competition and they
also got new technologies by
collaborating with MNCs .

°
Some large Indian companies become MNCs like TATA Asian Paints Infosys ele and , , ,
contributed to economic
growth of India .

° As many
foreign companies come to India , huge number of jobs were created and
more opportunities were created for Indian companies .

Consumers more choices and cheaper This also increased the standard
products
got
°
.

of living of people .

NEGATIVE IMPACTS
small local businesses l companies could not face the competition and had to be shut
down Eg : toys factories of India etc
.
.

°
Labour laws were made flexible to attract foreign investment which was against the
employees .

°
Regional products like dhoti , matkaete are not growing or have been replaced by some
foreign product .

K3B Special Economic cones (St z) :

In recent years the Central and State Governments in India
°
,
set -

up industrial
called SEZ so as to attract
zones
, foreign companies to invest in India .

°
SEZs have world class facilities like
electricity , water, road ,transportation,
storage , recreational and educational facilities .

o
companies with in unit in SEG do not have to pay tax for first five years and
have flexibility labour laws .

How Globalisation can be made fair ?

°
Govt must protect the
.

interest of all the people not just the rich such as by

,
.

making better labour laws and implementing them .

o
Govt .
can support small producers till the time they get strong enough to compete .

Govt . can use trade barriers in favour of them .

°
Govt . Can
align with other developing countries to fight against the domination
of developed countries in WTO .
 Imp Yds
Fosse
Today, the world has been converted into a large village with the help of
efficient and fast moving transport. Transport has been able to achieve
this with the help of equally developed communication system. Therefore,
transport, communication and trade are complementary to each other.
Today, India is well-linked with the rest of the world despite its vast size,
diversity and linguistic and socio-cultural plurality. Railways, airways,
waterways, newspapers, radio, television, cinema and internet, etc. have
been contributing to its socio-economic progress in many ways.
The trades from local to international levels have added to the vitality of
its economy. It has enriched our life and added substantially to growing
amenities and facilities for the comforts of life. It is thus, evident that a
dense and efficient network of transport and communication is a
prerequisite for local, national and global trade of today.
1-Why is there a need to interlink with the world?
2-Infer the importance of means of transportation and communication for
socio- economic progress?
3- How does trade strengthen the economy of a country? 151

④ There is need to interlink with the world for

ans
advancement
globalization
,
development
etc .
,

② -

i, They are the very basis of industries and trade of country .

dis create job employment opportunities .

ciii, Help to
grow economy
③ Y,-

Trade between nation and countries are the index to its economic
prosperity
% , It
generates employment .

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often Analyseany 5 positive effects of globalisation on the Indian

Economy .

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ch¥a what is liberalisation ? Describe

any four effects of liberalisation on Indian
Economy .

cbse
not
 "

toffs E the
foreignstatement
Trades
integrates
with
the markets in different countries ! Support
arguments pg -
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