Globalisation and the Indian Economy

Today we can choose from a wide range of goods made around the world, from mobile phones and televisions to toys and processed food, and many services are provided by companies based in other countries. In this chapter you will learn how multinational corporations (MNCs), companies that own or control production in more than one nation, set up production where it is cheapest and closest to markets, and how they spread production by setting up factories, buying local companies, forming joint ventures and placing orders with small producers. You will see how foreign trade integrates markets across countries, as in the example of Chinese toys in Indian markets. You will study globalisation, the rapid integration of countries through trade, investment, technology and movement of people, and the factors behind it: rapid improvement in technology, liberalisation of foreign trade and investment policy in India from 1991, and the role of the World Trade Organisation. Finally, you will examine the impact of globalisation on consumers, producers, workers and small industries, and the struggle for fair globalisation.

Detailed Worksheet: Globalisation and the Indian Economy Section A - Definitions (10 marks) 1. What is a multinational corporation (MNC)? Give two examples. (2 marks) 2. What is meant by globalisation? (2 marks) 3. Define foreign trade and foreign investment. (2 marks) 4. What is liberalisation? When did India liberalise its economy? (2 marks) 5. What is the World Trade Organisation? State one of its aims. (2 marks) Section B - Calculations and Applications (15 marks) 6. A toy made in China sells in India for Rs 300, while a similar toy made in India sells for Rs 450. Calculate the percentage by which the Indian toy is costlier. What effect will the import of Chinese toys have on Indian consumers and on Indian toy makers? (3 marks) 7. An MNC pays a factory worker in Country X Rs 20,000 per month and a similar worker in India Rs 12,000 per month. Calculate the saving per worker per year in India. If the MNC employs 500 workers, calculate its total annual saving. Name two other factors besides wages that attract MNCs. (3 marks) 8. Study the illustrative data: a country's exports were USD 300 billion in 2010 and USD 450 billion in 2020, and imports were USD 350 billion and USD 600 billion respectively. Calculate the trade deficit in each year and the percentage growth in exports. (3 marks) 9. In 1995, Ford Motors set up a plant near Chennai with an investment of about Rs 1,700 crore. If such an investment creates one direct job for every Rs 50 lakh invested, estimate the number of direct jobs created. Name two ways in which the local economy benefits from such a plant. (1 crore = 100 lakh) (3 marks) 10. Arrange in chronological order: the Special Economic Zones Act is passed; India begins economic liberalisation; Tata Motors buys the British brands Jaguar and Land Rover; the World Trade Organisation is set up. Give the years. (3 marks) Section C - Diagrams (10 marks) 11. Draw a flowchart showing the different ways in which MNCs spread their production: setting up factories, joint ventures, buying local companies and placing orders with small producers. (4 marks) 12. Draw a world map sketch with arrows showing an MNC with its headquarters in the USA, a factory in India, customer care in the Philippines and design in Europe. (3 marks) 13. Draw a mind map showing the factors that have enabled globalisation. (3 marks) Section D - Analysis and Higher-order Thinking (15 marks) 14. 'Globalisation has not been equally beneficial for all.' Explain this statement with examples of who has gained (well-off consumers, skilled workers, large Indian companies) and who has lost (small producers, workers with insecure jobs). (5 marks) 15. Explain how technology has stimulated globalisation, with examples of transport, telecommunications and information technology. Why did governments remove barriers to trade and investment, and what has been the role of the WTO in this process? (5 marks) 16. What is fair globalisation? Explain the role that the government can play in making globalisation fair, through labour laws, support to small producers and negotiations at the WTO. (5 marks) Instructions: Time allowed 2 hours. Attempt all sections. Answer with examples from India. Show all calculations in data-based questions step by step.