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The section explores the factors enabling globalisation, such as advances in technology, policy changes promoting trade, and the pressures exerted by international organizations like the WTO. It highlights how these factors contribute to the global spread of production and the interaction between multinational corporations (MNCs) and local economies, particularly in the context of India's economy.
Globalisation is a process that integrates economies, cultures, and societies across the world, driven primarily by advances in technology, liberalization of trade and investment policies, and pressures from international organizations, such as the World Trade Organization (WTO). Over the past thirty years, multinational corporations (MNCs) have played a significant role in this process by relocating production to regions where costs are lower, often in developing countries like India.
These elements have led to heightened interdependence, where production and services are often linked across countries. MNCs take advantage of this interconnectivity to optimize production processes, creating both opportunities and challenges for local industries.
Globalisation: The increasing interconnectedness among countries driven by trade and investment.
Multinational Corporations: Major players in globalisation, facilitating the movement of goods and services across borders.
Liberalisation: The process of removing trade restrictions to foster economic growth and foreign investment.
WTO's Role: Influencing global trade policies and practices, especially for developing countries.
Global trade is fast and wide, technology's the trusted guide.
Once a firm wanted to spread its wings, technology helped, and business sings! They found new markets across the sea, liberalisation made it easy as can be!
To remember key factors: TLI - Technology, Liberalisation, International Organizations.
Ford Motors establishing a manufacturing plant in India to take advantage of lower production costs while exporting cars globally.
The rise of local Indian companies benefitting from the influx of foreign investment and competition post-1991 liberalisation.
Term: Globalisation
Definition: The process of increasing interconnectedness among countries, particularly in terms of trade, investment, and culture.
The process of increasing interconnectedness among countries, particularly in terms of trade, investment, and culture.
Term: Multinational Corporations (MNCs)
Definition: Companies that operate in multiple countries, controlling production facilities or offices abroad.
Companies that operate in multiple countries, controlling production facilities or offices abroad.
Term: Liberalisation
Definition: The removal of restrictions and barriers to free trade to promote economic exchange.
The removal of restrictions and barriers to free trade to promote economic exchange.
Term: WTO (World Trade Organization)
Definition: An international body that regulates trade rules and agreements among nations to facilitate free trade.
An international body that regulates trade rules and agreements among nations to facilitate free trade.
Term: Foreign Investment
Definition: Investment made by a person or entity in one country in a business or assets located in another country.
Investment made by a person or entity in one country in a business or assets located in another country.