Chapter 4 - Globalization and the Indian Economy
This chapter is about globalization. Here you will learn about integration between countries through foreign trade and foreign investment by multinational corporations (MNCs). You will also learn about the role MNCs play in the globalization process. The final section of this chapter focuses on the impact of globalization and the extent to which it has contributed to development processes.
Vidyakul CBSE Notes Class 10 Economics Chapter 4 - Globalization and Indian Economy, we mainly dealt with production integration and market integration. This will help us better understand the globalization process and its impact. You can download these Vidyakul CBSE Class 10 Social Studies Notes in pdf format.
Production
trade between countries was a major channel connecting distant countries. Large corporations, now called multinational corporations (MNCs), play an important role in trade. An MNC is a company that owns or controls production in more than one country. MNCs set up offices and factories for production in locations where they can get cheap labor and other resources so the company can earn more money.
Combined production between countries
Money used to purchase assets such as land, buildings, machinery, and other equipment is called investment. An investment made by MNCs is called a foreign investment. MNCs are exerting a strong influence on production at these distant locations. As a result, production in these widely dispersed locations is getting interlinked.
There are a variety of ways as mentioned below, in which MNCs are spreading their production and interacting with local producers in various countries across the globe.
- By setting up partnerships with local companies
- By using the local companies for supplies
- By closely competing with the local companies or buying them up
MNCs set up production jointly with local companies which benefits local companies in the following ways:
- First, MNCs can provide money for additional investments, like buying new machines for faster production.
- Second, MNC can bring the latest production technology.
Foreign Trade and Market Integration
Foreign Trade allows producers to expand beyond the domestic market. Producers can sell their products not only in markets located within their own country but also in markets located in other countries around the world. Likewise, buyers have the opportunity to choose from a wide range of products in addition to domestic products. Thus, foreign trade leads to the linking of markets or integration of markets in different countries.
What is Globalization
Globalization is the process of rapid integration or interconnection of countries. MNCs play an important role in the globalization process.
More and more goods and services, investments, and technologies are moving between countries. There is another way to connect countries. This is due to the movement of people between countries.
Contributing Factors to Globalization
{Technology}
The rapid development of technology has been one of the major factors driving the globalization process. This has made it possible to ship goods much faster over longer distances at a lower cost. Advances in information and communication technology have made information readily available.
{Foreign Trade Liberalization and Foreign Investment Policy}
Trade barriers are restrictions imposed by governments. Trade barriers can be used by governments to increase or decrease (regulate) foreign trade and determine what kinds of goods and how much. Import duties are an example of a trade barrier.
The removal of government barriers or restrictions on trade is called liberalization. You are considered freer when the government imposes fewer restrictions than before.
World Trade Organization
The World Trade Organization (WTO) is an organization that aims to liberalize international trade. Currently, 164 countries around the world are members of the WTO. He set the rules for international trade so that developed countries could allow free trade for all.
How Globalization Affects India
Globalization has affected the lives of people in India in the following ways.
This has led to an increase in living standards. Globalization has created new opportunities for service companies, especially in the IT sector.
Fighting for a Fair Globalization
Fair globalization creates opportunities for all and better distributes the benefits of globalization. Governments can play an important role in making this possible.
Some of the actions the government is taking include:
You can ensure labor laws are properly enforced and workers' rights are respected. They can help small producers improve their productivity. Governments may use trade and investment barriers when necessary. They can negotiate in the WTO for "fair rules". It can also join forces with other developing countries with similar interests to fight developed country domination in the WTO.
Frequently asked Questions on CBSE Class 10
What are the benefits of globalization?
1. Access to foreign cultures
2. Technological innovation
3. Improved living standards
4. The emergence of new talent
5. Higher standards of living
What are the main elements of globalization?
Principle elements of globalization are
1. International trade
2. foreign investment
3. capital market flows
4. labor migration
5. diffusion of technology
What are the different types of globalization?
Political, economic, and cultural globalization are the main types of globalization.
