GLOBALISATION &

THE INDIAN
ECONOMY

DONE BY :
ASLAM SULTAN
CLASS : X C ; ROLL NO :

WHAT IS
GLOBALISATION!
It is the process of rapid
integration or
interconnection between
countries.
There is one more way
through which countries are
becoming closer and that
isMovement of peoplebetween
countries. People usually move
from one country to another in

Impact of Globalisation
in India
Greater competition among
producers - both local and foreign
producers has been of advantage to
consumers.
There is greater choice before
these consumers who now enjoy
improved quality and lower prices for
several products.

FACTORS THAT HAVE

ENABLED
GLOBALISATION
TECHNOLOGY:Rapid improvement in

technology has been one major

factor that has stimulated
globalisation process. Due to
technology there has been
improvements in various fields as
in :

1.TRANSPORTATION TECHNOLOGY.
In past fifty years this
technological improvements has led
to faster delivery of goods across
long distances at lower caste.
Containers for transport of goods:
have led to huge reduction in
port handling costs, increased
the speed with which goods can

c) Airlines: the cost of air transport

has fallen, this has enabled much

greater volumes of goods being
transported by airlines.
2.INFORMATION AND
COMMUNICATION TECHNOLOGY:

IT, has played a major role in

spreading out production of
services across countries.

Remarkable improvements have in

the areas of telecommunications,
computers &internet.
Telecommunications:facilitated by
the satellite communication devices,
contact
the world,
to access
facilitiesaround
as telegraph,
telephone
the
information
instantly,&
to to
including
mobiles,
fax are used
communicate in the remote areas.

Computer and
internet:computers have entered
in almost all the fields.
Internet allows one to share
information on almost every thing,
we can send instant e-mail and
talk through voice-mail across the
world at almost negligible cost.

REASONS / FACTORS FOR THESE

RAPID TRANSFORMATIONS?
Middle of twentieth century:
Production was largely organized
with in the countries
What crossed the boundaries was
mainly the raw materials, food stuff
and finished products.
Trade was the main channel
connecting distant countries.

TRADE AND FOREIGN

TRADE
HISTORY:
Various trade routes connecting India
and South Asia to markets both in the
East and West & extensive trade that
took place along these routes.
It was trading interest which attracted
various trading
companies such as
East India Company to India.

Function or purpose of
foreign trade?
Foreign trade creates an
opportunity for the producers to
reach beyond the domestic markets
i.e., markets of their own countries.
Producers can sell their produce
not only in markets located within
the country but can also

compete in markets located in

other countries of the world.

For the buyers, import of goods

produced in another country is
one way of expanding the choice
of goods beyond what is
domestically produced.

EFFECTS OF FOREIGN TRADE:

There are various positive &

negative effects of foreign trade. Its
positive effects are
With the opening of trade, goods
travel from one market to another.
Choice of goods in the markets
rises.
Prices of similar goods in the

Producers in the two countries

now closely compete against
each other even though they
are separated by thousands of
miles.
Foreign trade thus results in
connecting the markets or
integration of markets in
different countries.The
economies of various countries
are gettinginterlinked.

How foriegn tradebenefit

to India & to China?
ToChina:Chinese got an
opportunity to trade and expand
their business.
--As they were selling it at high
selling price, they got high profits.
--Within an year 70-80% of toys
shops have replaced Indian toys with
Chinese toys.

ToIndia: Indian buyers have more

choice now.
--Prices are cheaper now.
--designs are new.
--But due to the cheaper prices &
new designs , the Indian toy
makers face losses, as their toys
are selling much less.

MNCSMulti national
corporations
It is a company that owns or
controls production in more than one
nation.
MNCs set up offices & factories
for production in the 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.
Many MNCs have wealth
exceeding the entire budgets of the
developing countries , with such
enormous wealth they have
immense power & influence.

FACTORS/ CONDITIONS
TO SET UP A MNC
MNCs set up production where it is
close to the markets.
where there is skilled labour
available at low costs.
where the availability of other
factors of production is assured.
They look for the government
policies that look after their

INVESTMENT:

The money that is spend to buy

assets such as land, building,
machines and other equipment is
called investment.
The investment made by MNCs is
calledforeign investment.

VAROIUS WAYS IN WHICH

MNCs ARE SPREADING
THEIR PRODUCTION:
There are variety of ways in
which MNCs are spreading their
production and interacting with local
producers in various countries
across the globe. They do this by
various means:

By setting up partnerships
with local company..
By closely competing with local
companies or buying them -the
most common route for MNC
investments is to buy up local
companies and to expand
production. With their huge wealth
they
easily
so..
Bycan
using
localdo
companies
for
supply - Large MNCs in developed
countries place orders

for production with small

producers.Eg., garments, footwear,
sports item etc. The products are
supplied to MNCs which then sell
these under their brand names ti
the customers.
As a result, production in these
widely dispersed locations is getting
interlinked.
MNCs are exerting strong influence

MNCS are playing major

role in the Globalisation
process.
MNCs have been looking for locations
around the world , which would be
cheap for their production
As a result of greater foreign
investment and greater foreign
trade ,has been greater integration of
production and markets across
countries.

investments and technology are

moving between the countries.
Most regions of the world are in
closer contact with each other than
a decade back
Foreign investment in the
countries has been rising.
Foreign trade between the
countries has been rising.

WTO-world trade
organisation
The functions of the WTO are as
follows:
Establishing rules for
international trade
Ensuring the rules are followed
Promoting removal of restrictions
on trade barriers
WTO is against barriers on trade in
the form of tariffs and import duties
as these impede the flow of capital,

Important questions
01. What is Globalisation?
Ans.Globalisation means opening up the
economy to facilitate its integration with the
world economy.
02. Define Economic reforms of new
Economic Policy 1991.
Ans.Economic policy adopted by the
Government of India since July,1991 is termed as
new economic policy or economic reforms.
03. Define Privatisation.
Ans.Privatisation means reduced government

04. What is meant by Liberalisation?

Ans. Liberalisation means removing
unnecessary trade restrictions and making the
economy more competitive.
05. What is outsourcing?
Ans. Outsourcing means going out to a source
outside the company to buy regular service that
formerly used to be provided departmentally
and internally just as legal advice, computer
service, security, advertisement and accounting
etc.
06. What is meant by modernisation of the
Economy?

08. How many countries are currently the

members of the World Trade Organisation
(WTO)?
Ans.It has 153 member countries as on 23
July, 2008.
09. In which year, the government started
to remove barriers on foreign trade and
foreign investment.
Ans.In 1991
10. Why are the Chinese Toys popular in
the world?
Ans.Chinese Toys are comparatively cheaper
and have new designs. That is why they are

12. Name the organisation which lay

emphasis on liberalisation of foreign
trade and foreign investment in India.
Ans.World Trade Organisation (WTO)
13. When was the UNO established?
Ans. The UNO was established on 24
October, 1945.
14. When was the WTO established?
Ans.The WTO was established on 1st
January, 1995.
15. Where is the main Head Office of