Globalization refers to the process of integrating a country's economy with the global economy, facilitating the unrestricted movement of goods, capital, and people across international borders.
Trade has historically been the key link between distant countries, and it is primarily driven by large firms known as Multinational Corporations (MNCs).
Interlinking Production Across Countries
In some cases, MNCs collaborate with local companies in foreign countries to produce goods. This joint production offers several benefits to the local company:
Investment and Foreign Investment
Investment refers to the expenditure on acquiring assets like land, buildings, machinery, and equipment. Foreign investment, on the other hand, pertains to funds from MNCs or foreign entities directed towards local assets.
By partnering with local companies, sourcing supplies from them, competing with them, or even acquiring them, MNCs significantly impact production processes in various regions around the world.
Foreign trade enables producers to reach customers beyond their local areas.
Small traders of readymade garments facing stiff competition from both the MNC brands and imports.
Globalisation is about how countries are being rapidly integrated and connected, mainly due to the activities of multinational corporations (MNCs). There is a growing exchange of goods, services, investments, and technology between nations.
Several key factors have enabled globalisation:
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Key Concepts: Globalisation & the Indian Economy
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Globalization has enhanced consumer options, resulting in superior product quality at reduced prices, thereby elevating living standards.
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1. What is globalisation and how does it affect economies? | ![]() |
2. What are the main factors that have enabled globalisation? | ![]() |
3. What is the role of the World Trade Organisation (WTO) in global trade? | ![]() |
4. How has globalisation impacted India’s economy? | ![]() |
5. What are the challenges in achieving fair globalisation? | ![]() |