WHAT IS GLOBALISATION

Globalisation is a process of international integration arising from the interchange

of world views, products, ideas and other aspects of culture.

A major role in played by MNCs in the process of globalization.

It has opened a large source of exchange between two countries of goods,

services, investments and technology.

Another source of connectivity among the countries are the people

– who are moving in search of better job, income or education.

PRODUCTION ACROSS COUNTRIES

Colonies such as India, exported raw materials and food stuff and imported finished goods.

Trade was the main channel connecting distant countries. This was before large
companies called Multinational Corporation (MNCs) emerged on the scene.

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

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

This is done so that the cost of production is low and the MNCs can earn greater profits.

The goods and services are also produced globally. Therefore, production is organized in
increasingly complex ways.

INTERLINKING PRODUCTION ACROSS COUNTRIES

MNCs look for government policies that look after their interests.

The money that is spent to buy assets such as land, building, machines and other equipments
is called investment and an investment made by MNC is known as the foreign investment.

At times, MNCs set up production jointly with some of the local companies of these countries.

FOREIGN TRADE AND INTEGRATION OF MARKETS

Foreign trade creates an opportunity for the procedures to reach beyond the
domestic market.

Producers can sell their produce in their own country as well as in other countries
of the world.

Goods can be imported to expand the choice.

With the opening of trade, goods travel from one market to another.

Producers in the two countries now closely compete against each other.

Foreign trade, thus, results in connecting the markets or integration of markets in

different countries.

CHINESE TOYS IN INDIA

Chinese manufacturers export toys in India, where toys are sold at a higher price.

Buyers in India have choice between Indian and Chinese toys.

Because of cheaper price and new designs, Chinese toys became more popular
in the India markets.

Indian buyers have a greater choice of toys and at lower prices.

For the Chinese toy makers, this provides an opportunity to expand business.

Indian toy makers face losses as their toys are selling less.

WHAT IS GLOBALISATION

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

MNCs play a major role in promoting globalisation.

More and more goods and services, investments and technology are moving between countries.

It helps in the movement of people between countries.

People move in search of better income, better jobs or better education.

In the past few decades, there have not been much increase in the movement of people between
countries due to various restrictions.

FACTORS THAT HAVE ENABLED GLOBALISATION

Technology → improvement in technology is one of the factors that has stimulated the globalisation.

Improvement in transportation has made it possible to deliver the goods faster.

Development in information and technology brought remarkable changes in globalisation process.

Telecommunication, computer, internet have brought the world closer.

Information technology has made communication faster and easier.

This has been facilitated by satellite communication devices.

Internet also allws us to send instant electronic mail (email) and talk (voice mail) across the world at
negligible cost.

Indian government, after Independence, had put barriers to the foreign trade and foreign investment,
called trade barriers.

Government can use trade barriers to regulate foreign trade.

After 1991, some far reaching changes were made in Indian foreign policy.

It was meant to compete with the global world.

Removing barriers or restrictions set by the government is called liberalisation.

WORLD TRADE ORGANISATION

WTO is an organization whose aim is to liberalise (rational) international trade.

It was established by developed countries with certain rules and regulations regarding International trade.

WTO is supposed to allow few trade for all, in practice, it is seen that the developed countries have
unfairly maintained the trade barriers.

Whereas WTO rules have forced the developing countries to remove trade barriers.

IMPACT OF GLOBALISATION IN INDIA

Globalisation and greater competition among producers both loan and foreign producers has been of advantage to
consumers, particularly the well-off section of the urban areas.

As a result, they enjoy much higher standard of living than was possible earlier.

Among producers and workers, the impact of globalization has not been uniform.

MNCs have increased their investments in India over Several of the top Indian companies have been able to
the past 20 years, which is beneficial for them. benefit from the increased competition.

Their products are cell-phones, automobiles, fast food,

They have invested in newer technology and production
etc.
methods and raised their production methods and
production standards.

These products have large no.of buyers and these

industries have created new jobs too.
Globalisation has enabled some large Indian companies
to emerge as multinational themselves – eg. Tata, Asian
Paints, etc.
And local companies supplying raw materials, etc.
to them have prospered.