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The section discusses globalization through the lens of Indian economic development, emphasizing how multinational corporations (MNCs) facilitate trade and foreign investment. It examines the factors driving globalization, particularly technological advancements, liberalization policies, and the influence of organizations like the WTO, as well as the varied impacts on different segments of society.
The phenomenon of globalization refers to the increasing interconnectedness of our world across cultural, political, social, and economic dimensions. In this chapter, globalization is specifically defined as the integration between countries facilitated by foreign trade and investment, particularly through multinational corporations (MNCs).
As we explore these topics, special emphasis must be placed on understanding the integration of production and markets as the groundwork of globalization and the complex interactions that characterize this transformative process.
Globalisation: The interconnectedness of economies.
MNCs: Companies with production activities spanning multiple countries.
Liberalisation: The reduction of trade barriers.
WTO: An organization that oversees international trade laws.
Foreign Investment: Investment in a foreign country for business purposes.
Globalization's wide embrace, connecting each market space!
Once there was a small factory struggling to compete, but an MNC arrived with products that could not be beat. They brought in new tools and more ways to inspire – the small producer either had to adapt or retire!
To remember key factors of globalization: T - Technology, L - Liberalisation, M - MNCs.
Ford Motors establishing production plants in India to benefit from local markets and lower production costs.
Indian consumers having wider choices of goods and services due to MNCs entering the market.
Term: Globalisation
Definition: The process of increasing interconnectedness and interdependence among countries, primarily through trade and investment.
The process of increasing interconnectedness and interdependence among countries, primarily through trade and investment.
Term: Multinational Corporation (MNC)
Definition: A company that owns or controls production facilities in more than one country.
A company that owns or controls production facilities in more than one country.
Term: Liberalisation
Definition: The removal or loosening of restrictions on trade and investment by governments.
The removal or loosening of restrictions on trade and investment by governments.
Term: WTO (World Trade Organisation)
Definition: An international organization that regulates international trade and aims to facilitate smooth and free trade among nations.
An international organization that regulates international trade and aims to facilitate smooth and free trade among nations.
Term: Foreign Investment
Definition: Investment made by a company or individual in one country in business interests in another country.
Investment made by a company or individual in one country in business interests in another country.