Globalisation and the Indian Economy

Chapter-4.
Important Terms- onmie f
f an eonmy
with ihe the n
obalinaton i Globalinntion mean froe interartim

the world
tDTAation i Laberalisatai of t h e e c n y
i from dirvet ar physical oontrole

Lmposed by the government. to wet p nduatries whieh

vate
sector We
allowint the
vAtation :
Privatination nwann

Worid Trade Organisation WTO): It in an orgnnnation whien " * V a i n g the

world trade thruugh globalisation country

*"* pany owh" or cuntni printik
hat
uildings. machines and other
n ne money that n pent to buy anset *u
equipment, is called investment. ent.
ealled
n Investment
: lnvestment
made by MNC
in
ogt
o
ODalisaton and the indan EEonony

o The Siru
Producion Foreign Trade What is Factors thet ld Trade lisa

Counies
ard Intagration Globalaton Have Enabled Organisation n India Globalaton
ol Markats Globalisaton

Producbon Across Countries

s countries.
than one naon
wwe oroduding he MNC keep in minc
Cheap manutactunng kabon
a e t

in other countries
NCS and hair ways controlling production
ofl

Pacing orders Plce orders

Fon n Trade and Integration of Markets

ww
Eschangs of Cesles opporunty

domestic market

S p e lh declel Scienoe-10
 tet handfher
Ovemen of
Very eaty t s intrmaion instay nd
co with
Pae r
couxe KINS te wortt

To seim
at

(Lbealisadion of ftornign brde and lonign esnnt.olley)

e repordgoods and

MOs a Free nes ina Many WNCs have inesd in bunking. tsuctre, sot

Govenment has read Special Economec Zones bprovids basc hcibes tr endusthahsban

World Trade Orgarisation is an orgarisation wtich deals with the nules dt tade among te nators

De tade among counties o the word n an apen, untm m

t d e nde d a
nondac
oide chrical assistancs and taining lo e develbpad and he underdenicged ecnoris
thns nds ad ngators which al the menbers have to adegt tor the soct urinn of a e

mtafons
Dnekped cnpes have urtay saned ada banen where WIO N a O g cau

0 Sesess in Seciel Seence-10)

 C

a bne tge at

pety

arrg e pa

t e C

Competency Based Questions

A) Mutiple Choice Questions: (a) Boch ( and (i)
correet anser trom tbegve
tte Only
Q1 Wich of the following is not correctith e) Only
(a) Nerther (9 nor ( i )

An MNC owns and coatrols

production in more than one sation T b e o s t c o n route for investmentby
the MNCsin countries around the worid is

from
local producern hav gained
(Al theMNC to:

(a) set up new factories

 a
. Aasrtian i Tas Hngrta raa
he esi
easn 1ivernt
wmpan
decreae fufvign taail

the a lumn
aiebalisn
" the
livi
conditlon
people givon
. in the developra tu correct answer from the options
in the deve.
orkers
ountries
Column A
of the abov Foreign
mone
( Money prnt by (a)
the citizenn of
the *
nng
hon.
Baseed
u) natinn.
lavestment by MNC(6) Foreign Trad

n u b e r s I to 5, two statements ar ABother country.

elabelled Asserhon ta ana he o e (fn Rapid mvement o t c w a n e

MdRraon i ro
to another
R true and R n the corTect
t h A and are

ntion of the ae Ans. 0- .

R not the OOng_ ns n
Both A
and ar "e anaassertion. the
apianatui ot
cerreet
alse. control
A true Dut t
i 9.1. National eompani
0
production n moe

al co
a and contre
nies eEp Ans.
M
local companies Eroductinn in mure than one nate
Raason:The actrvities t 2 Globalisation means to free the r o
manufacturlu * frem direet or physical c p

nthes
toi
laberalinatian eheafts th tre the ecumy
Ans.

Orge atio. orm irect or phyaical controls imposed by the

A ations fer all the member

wrnent
Aatior mad is
Organasation handles Dy anai companies
Reason: Worid
Trade tment
upue Ann. Investment made by Multinatiunal eompariies
i called foreign
investnent.
q4 Aasertion : Indian overi
Pate of ecoromie grewth of lndia is
) FIl In the Blanks
oT rapld integration
Che process
ntereonnection between countries.

uiobalisation

AEFLuon : Hapid improvement in technologyAns.

a sumuinled the glotbaliaatien process. . 1s one of the major lactors that has
Reason: Everyone has benefitted from stimulated the globalisaton process

OALatio. Ans. Tecoio

OPNSrcase in
Sociel Bdne-10
 Q.2. Any kind O eh are
impo.
and write a single
Y htormation the K o v e r e *country to eh
how DI KO0Os
nhd
services are
free

.
in the process of integration o a.

le barrier
An.
To allows free fow of trade, eapital and
human resource ncross borders.
Ans. Globaliaation

Very Short Answer iypo Questions (1 orz Maenks each)

domentice market8.Justify by giving o
91. What is an MNC?
reason.
or controis proxuction
im ns Ans. P r o d u c e r s c a n He ther p r t h o t only in l o a

market but in narket to0

Distinguish between investment and tue e "
Foreign investment I C H S E 2019 (0)} Q.6. Due to whic r e o d e ls of
*** tnent in money npent to buy assets by diferent tems are uvaaDie_within Ou

reach ICBSE 2016 (0)

tinvestment
h e is the money
nation
perntwhereas torelgn
by other citzens Ans. Due to globaso
4.3. State any two ways through whieh MNCs 9.7. Deine iberalsaton
expand production.
Removing unwanted Dae or restrictions set
Ans () By setting up partnerehip with local
by the government o r a a e and industry is
kno n
By ng the local compunie two way to
make
Q.4. Why do MN Globalisation just and talr.
factories in those regions where thev wet Ans. (0) overnment can ensure that labour law
cheap labour and other resourees? are properly implemented and the worken
TCBSE 2016 (ON
Ans. o lower the cost ot procd uct ion.
T o increase their pronts.
Government can reserve ome ite
exclusively for the small-scale and local

oreign trade erentes an opportunity producers

for the producers to reach beyona the

5hortAnswer ype suon (3 or 4 Marks each)

Q1. Distinguish between foreign trade and foreign investment.
Ans.
Foreigninvestment
nder oreign trade, goods arnd services 6) Under foreign investment n MNC ora country
cun to apother vests in another country
(i) It results in connecting the markets| () It promotes proce6s of induntrialisntion.
lts different
cu teta

Q2. State any four drawback of globalisation. This that workers' jobs
Tlexibly. meanw

Or N DO 0nRer tture.

Give three
any
2lobalisation.
arguments against ) Only rich aud educated class has
, E2014 benefitted from
Ans. () Globalisation has failed to solve the
(G0)
globalisa tion.
Globnlisation
between
han widened the
ka
the rieh and the
(n Globalisation and the pressure poo
competition have mubstantially changed How do Multinational
to
the lives of the workers. Faced with keep the cost of
production ot
Koods low ? Explain with
growink competO, monempers
these days preter to employ workers
examples
CBSE 201IJ (D)

Evergreen 100% Suceese in Bocil

e
 ta sna" produrer
order"
aring
nght shiha
MS daction ith small d hm
eondet funtear port are lorred t o r wertime to mass via

amples of industn na nde me

em y
By wpreeding produrtien arthvis
y

n i rarrira ou
hund the
* a " thmt P r t a
mber of mall paice
in different parta o the w o * e o

SmployinE conact
a t jan ten emdatu
wbere ear nanent basts, how thry it in Chins *here ehesp labwur
r k e r s only on a tetthray wilahe and the eutsmer car a m
h a t they do not have to pay F e t h call ortitres katedind
year orkers alno h a v e to
wbole
or the

uestions (5 or Mans
the advantages of Multinational the rowth lecal
( ) Helpful in

producers : Poreign trade by t

a Availability of Capita na torelgn MSU
local to
isvesne . prod ucers reath be2
o capital and foreign investment ounts
the underdevelopea ana t Q.2 Explalin any three steps taken
reteps
taken by the
ne nonethat
onuntries pent to buy
Central and State o nenaar
iBDent. is called investment Cpanew
CESE O4, 1017
Availability of foreign exchange M Ans.
Can be helpful in sofwing pro (9speeial economic ones
fareigicnange o e have worid-class facilities vuch cbesp
huge sbortage of
foreign eican eiectncity. **, ra tn
but. with the entry a
a n g e serves.
ne a, a y
()
ecreational ana educ
Plexible labour laws: Labour laws a r

(i) Prom N heln from small

cale and local industres in manutacturing (in Removal of trade barriers: Governmest
ports ems, ttc bas removed barners on
are e a m p i e s or industnes where te sorn to a
f small producers around the worid. The
and ofc d
under their own brand
e selthese io) Poliey of liberalisation nd
Foreign Trade and Iategration globalisation Ater 1** policy
naian the
met nas adopled
orMarkets : The MNC beip. in te
wore ta e
globalisatun a a
o marketa the N
t y a MNCa even the small countries )ApO l fe industries need
for other eountries The MNCa increase the ioenae to operate.
foreigntrade
 What is VWTO ?
NMentien i
Mentien ts n *maja"
Innd,
equipment,
buildinge, macbines and
n ta nystment
wrte note on Wor Id Trade
inatton ()Avallabiney o Toreign exch
r
the World Trade
HN Mareh 201 ehange 1
Orgnnisation i rhlem of
of forein
orei eh.ing
n e n dea in with the rüle o

s
reide amung the nat underdeveloped andthe devlh
n the W7D:
a he tAjor atm of the WTO is ta conduct the entry of the MNC», t with
e toal trade
hot cuntries nange Feserves
anu
on hon (id) Fore gn
incTminatory r
Sntegratio
a)
1hewTU the World Trade
or frell n the
a analies traue dispue Organisatso the
taa) The
entry o n the snal ee
World Trade have opneu up n oneatie market
Organisataon pruvides
and
he
he d nc traininK to
ohomes e uderdeveloped 0) Heipu the growth ofr
t t
toT Rs rules and regulations which all produce : r o r e g n t r a d e b y the MNC.
the
members have to
ndopt tor the 0oth
sn
reutes an
oppo ny
or the
local
trade nrkrets Art oestie
Limitati tear W
untres
Developed countries retained () BprenaineprouucOn nctuvities;
d e barriers whereas
a e l o p i n g countrieN to remove trade NCH preau theaP Con actuvities
barriers. .world. For
Vaml h
Q4. Explain the roducts
role of multinational United States or Japan. 1
Corporations in the
globalisation process manulncture t h China where eheap
CBSE 2014 (D), 2016 (D)| labour i8
avnilable ana tne custoner care

li d es located
"MMNCS are playing an
mportant role 1s well as unskilled workers.
sKILed
global
lisa
statement by giving any five suitable . w h a t are Special Economie Zones ? Why
arguments. ICBSE 2014 A e y oeen set up C B S E 2012)
Dr
How have MNCs helped in globulisation7 Explain any five facilities available in the
Explain. TCBSE 201) Special Economic Zones developed by the
() S"ent,
TCBSE 20I9 (D|
Ans. )
Explain the role of MNCs in the process an are, specla conomic 0nes
of globalisation.
electricity, ronds and transport.
Ans. () Availability of
eapital and foreign EAOn, education are available. They
nvestment The Multinational
to
am at to

invest in Lndia.
ttrinct torelgn companes

solve the Droblem eip

(2)
of the underdeveloped and ( They have
been set
up to
t
nvestment toreign companies to invest in inala
he aeveoping
countries. Most of the
4) units
unerdevelopea counies suer trom ompanies with produetion
to taxes
in ta
lack nii e puy
or Capital onequentiy.tner the
riate of
eeonomie RTOwth i8 low MNCs
set up tactories, nnd ofices for the
Gove
lexibility in h
production in
the8e develop:ng
the underdeveloping countries,
and
and
attract fureign investment.

Evergreen 100% Succese in Social Science-10

 / Case b a s e d
integrated Questions
Etract

w v e r nmentmasaive
fur proum
u

rmally low
C T

garine pu e" o ieT ur plus farm produrts a*

rintea
e designed " * other countey markets nt
i
ef the ning a f e r t i n g Tarmete irn t h e s r c u n

asking
to the Deln" design the evelpi
overBme nta.W na
hce ice inn London using teleredued trade harriers as per W
acilities. The designing is done you have gnored tne ra of

icatjon i

er. Aner printing. he hag n y e d our governmen

i r to London. Even nep
inting t
sop upporti
p supporting our arimers. y

designing at Instantly yournelves.

this Tree n b e
Tai aim to

ton bank " .1. Name an inet nal trade. trade.

Internet DAn
Multinational Corporation, the
iberanat" h e
the

Under a anised in inerrasingly 9 2 How far has the institution res i

product y Evaluate the stalene tor tree ana tair t a e sues
co n mind the given regarding
krepans

fuetion p r s o Ans. WTO esTt d sees that t h e

divided mt na pa llowed But. in practace wTO

ENC
aread out across the feearch
work ia
the developeu cu ariets, wherras on

In
moBt
Le
see.
ules ana developing count
)
im develupeu
countnes
nk a retmove trade Dut
carried out
USA Jnpan. U.A., etc
"The governen " ii
are manufactu
nna
Q.3. role n
ar
k
iaa) The
oods coniitry
which has mportant
another
in Junuiy. a n t should prepare s u n p
ASernbied

the cot a0 antage ns.

of information
Tech
iCes that must proteet tne r f
the role three
not only t the raen
Analye
o b l i n a t i o n by givink try.
nology
sure that labu
data and (4) o v e
reason
enables the quick transier of roperly implementea
Aas
IT he workers get ther Ta
deas globauy role beyond natiotnal
Government Cn t a . and
()
excluiVely rar
boundare fínancial
tranaactions
very
P
e governitent can
IT has made
u) t0
e and inventment ba
uota system,
import, u wTO
tor
the
witn

ETRACT: 2 Dekotiate
the bulk Call
provides fairer r u l
sector on of the ther develapin
Ticulture
nent and a sign to developed (u)
f can with similar nter
Jon
cDP in India Comps
with the share o o ainat the domi
the w T
in
oustry suc 1 and its sbare rN eloped countries
giealture 1a
loymenta n
0.5%! hAno are
2engage
engaRe
 lfare of ere
ETRACT

ef the Ameriean company, ne

p olh (A and (7
with production serea
h r i o r d Moton came to Indin in 199 d) Neither (8) nor (

done In eollabwration
i Ma
Mahindra,
nanufhcturer of jeepea m EXTRACT:
in
M o t o was selling 8,000 cnrs nurre A Production arross eountries

e hle nothe.000 Until the mlddle of the twent centur Pro

d ndis to South Arien, organised
within c o P r
uction
wR"
IRTKely
pany wants te develos Fard l What eroned the Dou countrie

raw material, to finished

componeat supplying hase for its other plants
across the Fobe. produ d food stuff and imported finished
Q1 Whieh of the following formation
helps
oods Trade was the main
ehannel connecting
to decide
that Ford is an MNC

t i s producing automobiles in more

distant
nies eountries.
called This A corparaOnS
multinational rge DMNC
compa
(B) It is
is an
an Am
Ameriean Compuny Souree B- Foreign trade and inteTation of
Onty CA rade
markets: Foreign pportunity
nly (B)
tor
Both (A) and (B) p rkets of their
(e)
id) Neither (A) nor (B
own countri
Producers ean selltheir produce not only ia
Ank
markets located witn u t can aho
92 Which is the most common route for compete in markets o a t e one countries
of the worid. Similatiy, tor the Duyers, tmport of
vestment
(A) To buy a loeal company gtoods produced in another country is one way
(B) To place orders to local producers o xpand e d wbat
lucec
(o) Only A
6) Only ( ) Source c- Impaet of globalisation in

6 Both A) and (8) India-Globalisation and Ereater competitio

a Neither 1A) nor t among producersot 0ca ana toreign
Ans. c) produces-has been avanRe to consuner
particularly the well-o" sections in the urban
Q.3. Ford is setting " production plant in
areas There s
greater eholee betore
India due to these
consumers who now enjoy tmproved quality
(A) Availability of capital
AVailability of eheap skilled labour sult, these people today, enjoy mueh higher
B
(C) Democratic government standards of living than was posmible earlier.
(D) India is a large market Souree A- Production across countries
(a) Only (A) and (D) H o w are MNCS a major force in conaec
(6) Only (B) and (D) ing the countries of the world ?
Ans. he
(e) Both A)
and (H)
activites of MNCB are spread over
many counun
(d) Neither (C) nor (B)
Their parent
Ans. )
one
carporation is located
nd
94. MNCs promote country ubsidiaries a *
Lered in many countries in the wor
A) World trade
Por example, ITT, a very large Ame
(B) Foreign investment
weryreen 19% Sucess in Soclal Sci
 producto in re
ican MNC
designe
ita local produrers in a r s
r
wnte in the United States and
wah
then the compents are manufactured
are then
hpe with kal nmpanue
loral eompathi
Tbeses
in t o Mesco and Eastern Europe compertin
untrieswhere these are annembled NG are erting*
products are sold all uyin rductun t the
and the nnished
pver the woria
A atirna Aa ult, prdte
a

in these widely dispersed locatns*

The cofmpany custumer care isdCarried
in de getting interlunked
out through calu cenu
that of India. is Indis
weloping
nations like Souree C- Impact of goballsution
integration of globalisation benefieial for
com
trade and
How s
Sere BPorein Comptt/
markeus. unera
CBSE 2021
main Due to the N r
How doe
1orelo
urade become a? Ans
Variety of prod ucts:
countries Economic Policy, t
chanpel in connecting t
Expansion of local
market: Foreign invested ther ay tne anety
or
the Indian consu
traoe
creaes
an opporunity
to reach the
beyond
domestic aDd quaity products
eaper
cheaper ates
at atea
oroducers
the infrastrurture
own
coun Developament in
Arkets, Le, o their
markets

tnes. Producers can ell their produce o

Due
to the polucy Ei0 ot
in within
located the
privatisatio,
the condtion in
Dot
only markets
cDuntry but can also compete in markela structure has tmprova a derably
worid. om
otber countnes of the Much progresa can
ocated in
ent many
MNC# play
munication ketor n" P

Foreign trade and MNCS- better

are providing
mportant role in trade. They spread private companies
with ervices to the consumer
their production by nleracting

o0000

n100 Sucoeas in Soc scienca-