Globalisation and the Indian Economy – CBSE Class 10 Economics
Full Chapter Notes | NCERT Summary | Board Prep 2024–25
Introduction
Globalisation is a term we hear often — in markets, technology, education, and even food delivery. But what does it truly mean?Globalisation and the Indian Economy Class 10
In simple words, globalisation refers to the process of integration between countries through trade, investments, information, and people. It allows the world to function like a single economy, where goods, services, capital, and ideas move freely across borders.
In this chapter, we explore how globalisation impacts India, how it’s connected to economic liberalisation, and how it affects producers and consumers alike.
What is Globalisation?
Globalisation means increasing interconnectedness and interdependence among countries. It involves:
- The movement of goods and services across nations
- Cross-border investments and trade
- Technological exchange
- Cultural interaction
For example, mobile phones designed in the USA may be assembled in China and sold in India — showing how production and consumption are globally integrated.
Factors That Enabled Globalisation
Several developments in recent decades have made globalisation faster and more effective. Let’s look at the main enablers:
1. Improvement in Transportation
Modern ships, airplanes, and road networks allow faster and cheaper movement of goods. Consequently, it becomes easier for companies to trade and set up global supply chains.
2. Rapid Advancement in Technology
The spread of the internet, communication tools, and digital platforms makes coordination between international branches more seamless than ever before.
For instance, customer service for a U.S. company might be handled from a call centre in Bengaluru.
3. Liberalisation of Trade Policies
Governments across the world — including India — have relaxed restrictions on the import and export of goods. This encourages the flow of investments and enhances economic cooperation.
4. Role of Multinational Corporations (MNCs)
MNCs play a major role in globalisation by spreading production and services across different countries.
What Are Multinational Corporations (MNCs)?
MNCs are companies that own or control production in more than one country. They often set up production units in places where:
- Labour is cheap
- Raw materials are easily available
- Laws are business-friendly
- Markets have high demand
Example: Coca-Cola, Samsung, Nike, and Infosys are well-known MNCs.
How Do MNCs Work?
MNCs usually operate through:
- Joint ventures with local companies
- Buying out local firms
- Direct investment in setting up new factories
They spread production across countries to reduce costs and maximise profits. As a result, global supply chains are created.
Globalisation and India
India opened its doors to globalisation in 1991 under the New Economic Policy, which included Liberalisation, Privatisation, and Globalisation (LPG).
Since then, India has witnessed major transformations:Positive Outcomes:
- Increase in foreign investment
- Growth of IT and service sectors
- Availability of global brands
- Better job opportunities in sectors like BPO and IT
Challenges:
- Local industries face competition from cheap imports
- Small producers may be forced to shut down
- Increasing inequality between urban and rural India
Impact of Globalisation on Consumers
Let’s now look at how globalisation has impacted you, the consumer.
Benefits:
- More choices in the market
- Lower prices due to competition
- Better quality products
For example, we can now choose between Indian brands and international options like Adidas, Samsung, or Amazon — all available at the click of a button.
Disadvantages:
- Encourages a consumerist culture
- Promotes foreign brands over local businesses
- Increases waste and overconsumption
Impact of Globalisation on Producers
While large-scale producers benefit from global markets, small and local manufacturers often struggle.
Benefits for Large Producers:
- Access to global supply chains
- Cheaper labour and raw materials
- Expanded customer base
Disadvantages for Small Producers:
- Can’t compete with MNC pricing
- Lack of capital and technology
- Job insecurity in small-scale industries
For instance, small textile workers in India find it hard to compete with mass-produced, machine-made clothes from global brands.
Interlinking of Production Across Countries
MNCs link production across countries to take advantage of cost differences and availability of resources. This results in a global value chain, where different parts of a product are made in different countries.
Example: A smartphone may have parts manufactured in Korea, assembled in China, and sold in India.
World Trade Organisation (WTO)
What is WTO?
The World Trade Organisation (WTO) is an international body that sets the rules for global trade. Its goal is to:
- Promote free trade
- Settle trade disputes
- Ensure equal treatment among nations
Criticism of WTO:
- Often seen as favouring developed countries
- Pressures developing nations to open their markets
- Does not protect the interests of small producers effectively
Globalisation: Boon or Bane?
Globalisation has both supporters and critics. Let’s compare:
| Pros (Boon) | Cons (Bane) |
|---|---|
| Access to global markets | Loss of local industries |
| More job opportunities | Exploitation of workers |
| Exposure to new tech and trends | Cultural erosion |
| Competitive prices | Environmental degradation |
How Can India Gain from Globalisation?
To make globalisation more beneficial for all, India needs to:
- Strengthen domestic industries
- Improve infrastructure and skill development
- Ensure fair trade rules
- Protect small producers and farmers
In addition, policies must focus on inclusive growth, where all citizens benefit—not just urban elites.
Key Terms
| Term | Meaning |
|---|---|
| Globalisation | Integration of economies through trade and investment |
| MNC | Company operating in more than one country |
| Liberalisation | Removal of government restrictions on trade and industry |
| WTO | International body that promotes and regulates global trade |
Practice Questions
Very Short Answer
- Define globalisation.
- What does MNC stand for?
Short Answer
- List any two benefits of globalisation to consumers.
- How do MNCs spread their production?
Long Answer
- Explain the impact of globalisation on Indian producers and workers.
- How has technology helped in the spread of globalisation?