Globalization has led to greater economic integration between countries through increased trade and movement of people, goods, services and capital. Technological advancements in transportation, communication and information technology have enabled this integration by reducing costs and improving connectivity. Multinational corporations have furthered globalization by setting up production facilities in multiple countries to take advantage of cheaper resources and access new markets. While globalization has increased competition and consumer choice, it has also negatively impacted some local producers who struggle to compete.

1. GLOBALISATION AND INDIAN ECONOMY

2. • It is the process of rapid integration or
interconnection between countries.
•There is one more way through which
countries are becoming closer and that
is Movement of people between countries.
People usually move from one country to
another in search of jobs or better
education. This is also a result of
Globalisation.

4. • Greater competition among producers -
both local and foreign producers has been
of advantage to consumers.
• There is greater choice before these
consumers who now enjoy improved
quality and lower prices for several
products.
• Foreign investment has increased.

5. FACTORS THAT HAVE
ENABLED GLOBALISATION
TECHNOLOGY: Rapid improvement in
technology has been one major factor that
has stimulated globalisation process. Due to
technology there has been improvements in
various fields as in next slides..

6. 1.TRANSPORTATION TECHNOLOGY.
• In past fifty years this technological
improvements has led to faster delivery of
goods across long distances at lower caste.
• Containers for transport of goods have led
to huge reduction in port handling costs,
increased the speed with which goods can
reach markets.

7. c) Airlines: the cost of air transport has
fallen, this has enabled much greater
volumes of goods being transported by
airlines.
2.INFORMATION AND COMMUNICATION
TECHNOLOGY:
IT, has played a major role in spreading
out production of services across
countries.

8. •Remarkable improvements have in the
areas of telecommunications, computers
&internet.
•Telecommunications: facilitated by the
satellite communication devices, facilities
as telegraph, telephone including mobiles,
fax are used to contact around the world, to
access the information instantly,& to
communicate in the remote areas.

9. • Computer and internet: computers have
entered in almost all the fields.
Internet allows one to share information
on almost every thing, we can send
instant e-mail and talk through voice-
mail across the world at almost negligible
cost.

11. REASONS / FACTORS FOR
THESE RAPID
TRANSFORMATIONS?
Middle of twentieth century:
Production was largely organized with in
the countries
What crossed the boundaries was mainly
the raw materials, food stuff and finished
products.
Trade was the main channel connecting
distant countries.

12. TRADE AND FOREIGN TRADE
HISTORY:
Various trade routes connecting India and
South Asia to markets both in the East and West
& extensive trade that took place along these routes.
It was trading interest which attracted various
trading companies such as East India Company
to India.

14. Function or purpose of foreign
trade?
Foreign trade creates an opportunity for
the producers to reach beyond the domestic
markets i.e., markets of their own
countries.
Producers can sell their produce not only
in markets located within the country but
can also compete in markets located in
other countries of the world.

15. For the buyers, import of goods produced
in another country is one way of
expanding the choice of goods beyond
what is domestically produced.

16. EFFECTS OF FOREIGN TRADE:
There are various positive & negative effects
of foreign trade. Its positive effects are
With the opening of trade, goods travel
from one market to another.
Choice of goods in the markets rises.
Prices of similar goods in the two
markets tend to become equal.

17. Producers in the two countries now
closely compete against each other
even though they are separated by
thousands of miles.
Foreign trade thus results in
connecting the markets or
integration of markets in different
countries. The economies of various
countries are getting interlinked.

18. How foreign trade benefit to India
& to China?
To China: Chinese got an opportunity
to trade and expand their business.
As they were selling it at high selling
price, they got high profits.
Within an year 70-80% of toys shops have
replaced Indian toys with Chinese toys.

19. To India: Indian buyers have more choice
now.
Prices are cheaper now.
designs are new.
But due to the cheaper prices & new
designs , the Indian toy makers face
losses, as their toys are selling much less.

20. MNC’S—Multi national
corporations
It is a company that owns or controls
production in more than one nation.
MNC’s set up offices & factories for
production in the regions where they can get
cheap labour and other resources.

21. This is done so that the cost of production
is low and the MNC’s can earn greater
profits.
Many MNC’s have wealth exceeding the
entire budgets of the developing countries ,
with such enormous wealth they have
immense power & influence.

23. FACTORS/ CONDITIONS TO
SET UP A MNC
MNC’s set up production where it is
close to the markets.
where there is skilled labour available at
low costs.
where the availability of other factors of
production is assured.
They look for the government policies
that look after their interests.

24. INVESTMENT:
The money that is spend to buy assets
such as land, building, machines and
other equipment is called investment.
The investment made by MNC’s is
called foreign investment.

25. VAROIUS WAYS IN WHICH
MNC’s ARE SPREADING THEIR
PRODUCTION:
There are variety of ways in which MNC’s
are spreading their production and
interacting with local producers in various
countries across the globe. They do this by
various means:

26. By setting up partnerships with local
company..
By closely competing with local
companies or buying them -the most
common route for MNC investments is to
buy up local companies and to expand
production. With their huge wealth they
can easily do so..

27. As a result, production in these widely
dispersed locations is getting interlinked.
MNC’s are exerting strong influence on
production at these distant locations.
By using local companies for supply -
Large MNC’s in developed countries place
orders or production with small producers.Eg.,
garments, footwear, sports item etc. The
products are supplied to MNC’s which then sell
these under their brand names ti the
customers.

28. MNC’S are playing major role in
the Globalisation process.
MNC’s have been looking for locations
around the world , which would be cheap for
their production
As a result of greater foreign investment
and greater foreign trade ,has been greater
integration of production and markets across
countries.
More and more goods and services,
investments and technology are moving
between the countries.

29. Most regions of the world are in closer
contact with each other than a decade back
Foreign investment in the countries has
been rising.
Foreign trade between the countries has
been rising.

30. WTO-world trade organisation
The functions of the WTO are as follows:
Establishing rules for international
trade
Ensuring the rules are followed
Promoting removal of restrictions on
trade barriers
WTO is against barriers on trade in the
form of tariffs and import duties as these
impede the flow of capital, investments an
technology. These mechanisms prevent the
functioning of free trade.