📘 Definition: Globalisation

Globalisation is the process of rapid integration or interconnection between countries through greater foreign trade, foreign investment, and flow of technology, labour, and information across international boundaries.

💡 Real-Life Examples of Globalisation

• iPhone: Designed in USA, parts from Japan, Korea, assembled in China, sold in India
• Cars: Ford India, Hyundai, Toyota - foreign companies manufacturing in India
• IT Services: Indian companies like TCS, Infosys serve clients in USA, Europe
• Call Centers: Indian workers answer calls from American customers

📘 Information Technology (IT) Revolution

The IT Revolution has made globalisation possible by:

• Instant communication through internet and email
• E-commerce - buying and selling online across countries
• Video conferencing for business meetings across continents
• Transfer of money through electronic banking

📘 Definition: Trade Barrier

Trade Barriers are restrictions imposed by governments on free import and export of goods. These include taxes on imports (tariffs) and quotas (limits on quantity of imports).

📘 Definition: WTO

World Trade Organisation (WTO) is an international organization that sets the rules for global trade between nations. It was established in 1995 and has 164 member countries.

⚠️ Criticism of WTO

• WTO rules are dominated by developed countries
• Developed countries have unfairly retained trade barriers on agriculture
• Developing countries are forced to remove barriers while developed countries don't
• Not truly fair to developing countries

📘 Definition: Multinational Corporation (MNC)

A Multinational Corporation (MNC) is a company that owns or controls production in more than one country. MNCs set up offices and factories in regions where they can get cheap labour and resources.

💡 MNCs as Key Players in Globalisation

MNCs are the main vehicle of globalisation. They produce goods and services across countries, connecting local markets with global markets. The money MNCs spend in a country is called Foreign Investment.

📘 Definition: Foreign Investment / FDI

Foreign Investment (or Foreign Direct Investment - FDI) is the investment made by MNCs in another country to set up factories, offices, or acquire local companies. It brings money, technology, and expertise to the host country.

📘 Special Economic Zones (SEZs)

SEZs are industrial zones set up by the government to attract foreign companies. These zones have:

• World-class facilities (electricity, water, roads)
• Tax exemptions for initial years
• Flexible labour laws
• No requirement for government permission for many things

📘 Definition: Liberalisation

Liberalisation is the process of removing government restrictions and barriers to allow free flow of goods, services, and capital between countries. In India, it started in 1991.

📅 Important Year: 1991

The year 1991 is significant because India faced a severe economic crisis (balance of payments crisis). As a result, the government under P.V. Narasimha Rao (PM) and Dr. Manmohan Singh (Finance Minister) introduced LPG Reforms:

• L - Liberalisation
• P - Privatisation
• G - Globalisation

• Consumers: Greater choice of goods at lower prices
• IT Industry: Boom in software exports, BPO, call centers
• Skilled Workers: Better jobs, higher salaries
• Large Companies: Access to global markets, foreign investment
• Service Sector: Banking, telecom, airlines expanded
• Urban Areas: More development, jobs, infrastructure

• Small Producers: Cannot compete with MNCs, forced to close
• Workers in unorganised sector: No job security, low wages
• Farmers: Face competition from cheap imports
• Local Industries: Batteries, plastics, toys faced closure
• Rural Areas: Less benefited compared to urban areas
• Environment: Pollution increased due to more industries

📌 Case Study: Indian Toy Industry

Before globalisation, India had a thriving toy industry employing lakhs of workers. After 1991, cheap Chinese toys flooded the market. Many Indian toy makers could not compete and had to shut down. Workers lost jobs and some committed suicide.

📘 What is Fair Globalisation?

Fair Globalisation means globalisation that creates opportunities for all, and ensures that the benefits of globalisation are shared more equally between countries and among different people within a country.

💡 Key Insight

Government policies can be designed to protect the interests of workers and small producers while still gaining from globalisation. The challenge is to manage globalisation in a way that benefits all, not just the rich and powerful.

Q1. When was WTO established?

Ans: 1995

Q2. What is the full form of MNC?

Ans: Multinational Corporation

Q3. In which year did India start liberalisation?

Ans: 1991

Q4. What is the full form of SEZ?

Ans: Special Economic Zone

Q5. What is globalisation? What are its main features?

Ans: Globalisation is the process of rapid integration between countries through trade, investment, and technology. Features: (1) Movement of goods across countries, (2) Flow of capital/investment, (3) Transfer of technology, (4) Movement of people for jobs.

Q6. What are trade barriers? Why do governments use them?

Ans: Trade barriers are restrictions on imports like tariffs (taxes) and quotas (limits). Governments use them to: (1) Protect domestic industries from foreign competition, (2) Raise revenue through import taxes, (3) Ensure national security by controlling certain imports.

Q7. What is MNC? How do MNCs spread production across countries?

Ans: MNC (Multinational Corporation) is a company that owns production in more than one country. Methods of spreading production: (1) Setting up own factories (Samsung in India), (2) Buying local companies (Cargill bought Parakh Foods), (3) Partnership with local companies (Maruti-Suzuki), (4) Placing orders with local producers (Nike with garment makers). MNCs choose locations with cheap labour, resources, and large markets.

Q8. Explain the impact of globalisation on India.

Ans: Positive: (1) Greater choice for consumers at lower prices, (2) IT industry boom, (3) Better jobs for skilled workers, (4) Foreign investment increased. Negative: (1) Small producers faced closure due to MNC competition, (2) Workers in unorganised sector suffered, (3) Farmers faced cheap imports, (4) Rising inequality between rich and poor.

Q9. How can we make globalisation more fair?

Ans: Fair globalisation means benefits should reach all, not just the rich. Government should: (1) Protect workers' rights and ensure labour laws, (2) Support small producers with credit and technology, (3) Negotiate better rules at WTO, (4) Invest in education. People should: Form unions, be aware consumers, demand accountability from MNCs.