Role of MNC’s & Liberalisation

policy in the development of

foreign trade & and its impact on
world economy
 Role of MNC’s development in foreign
trade
- provides money for additional investment.
- Bring the latest technology for production.

- Spreads their production by interacting with local

producers.

- By doing this they exert strong influences on

production and as a result production in these
widely dispersed local markets get interlinked .
 Liberalization Policy in development of
foreign trade
- Before there were strict restrictions on foreign trade and foreign
investment.
- With the New Economic Policy in 1991, there has been a drastic change in
the Indian economy.
- Goods could be exported and imported easily.
-Improvement of Stock Market
- Foreign companies could set up factories and offices.
-Economic reforms including modernisation, growth of the role of personal
and capital inflows, and the establishment of a free-market economy.
How does MNC’S and Liberalisation policy
impact world economy?
-Investment: MNCs bring in
investment to countries where
they operate & provide new
opportunities for growth and
development.
-Greater integration of
production and markets across
countries
-Job creation
- globalization
-Liberalization help countries
export more products
leading to an increase in foreign
exchange earnings and reducing
the trade deficit.
-Promoting innovation and
entrepreneurship
-improvement in stock market
-sustainable economic growth.
 QUIZ TIME
1-When was the new economic policy introduced ?

2-What is removal of barriers or restrictions set

by the government known as ?

3-What is the full form of MNCs?

4-State some Examples of MNC’s