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Revision Notes
Chapter-4
Globalisation and the Indian Economy

PRODUCTION ACROSS COUNTRIES:
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This was done before large
companies called multinational corporation (MNCs) emerged on the scene
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An MNC is a company that owns or controls production in more than one nation
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MNCs set up offices and factories for production in regions where they can get cheap
labour and other resources
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MNCs are not only selling its finished products globally but more important, the goods and
services are produced globally
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As a result, production is organized in increasingly complex ways
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In general, MNCs set up production where it is close to the markets; where there is skilled
and unskilled labour available at low costs; and where the availability of other factories of
production is assured
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The money that is spent to buy assets such as land, building, machines and other
equipment is called investment
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(i) MNCs can provide money for additional investments, like buying new machines for faster
production
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FOREIGN TRADE AND INTEGRATION OF MARKETS:
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WHAT IS GLOBALISATION?
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FACTORIES THAT HAVE ENABLED GLOBALISATION:
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Liberalization of foreign trade and foreign investment policy:
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It is called a barrier because some
restriction has been set up
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The government can use trade barriers to increase or decrease foreign trade and to decide
what kind of goods and how much of each, should come into the country
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The Indian government, after Independence, had put barriers to foreign investment
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This was considered necessary to protect the producers within the country from foreign
competition
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Barriers to foreign trade and foreign investment were removed to a large extent
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This meant that goods could be imported and exported easily and also foreign companies
could set up factories and offices here
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Removing barriers or restriction set by the government is what is known as liberalization
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The government imposes much less restriction than before and is therefore said to be
more liberal
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We have seen that the liberalization of foreign trade and investment in India was
supported by some very powerful international organization
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These organizations say that all barriers to foreign trade and investment that are harmful
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IMPACT OF GLOBALISATION IN INDIA:
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Globalization has also created new opportunities for companies providing services,
particularly those involving IT
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People with education skill and wealth have made the best use of new opportunities
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On the other hand, there are many people who have not shared the benefits
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Fair globalization would create opportunities for all and also ensure that the benefits of
globalization are shared better
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The government can play a major role in making this possible
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Its policies must protect the interests, not only of rich and the powerful but all the people
in the country
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It can support small producers to improve their performance till the time they become
strong enough to compete
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If necessary, the government can use trade and barriers
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In the past few years, massive campaigns and representatives by people’s organizations
have influenced important decisions relating to trade and investments at the WTO
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This has demonstrated that people also can play an important role in the struggle for fair
globalization

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