NCERT Class 10 Economics Chapter 4: Globalization & Indian Economy YouTube Lecture Handouts

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NCERT Class 10 Economics Chapter 4: Globalization & Indian Economy

Chapter 4: Globalization & Indian Economy

MNCs

  • Owns or controls production in more than one nation (cheap labor & resource, low cost, more profit)
  • NOT selling globally but producing globally (complex way)
  • Cheap production – China
  • Closeness to market – Mexico & Eastern Europe
  • Skilled Engineers – India
  • English speaking – Customer care
  • Favorable govt. policies
  • Save 50 - 60 % cost of MNC

Interlinking Production

  • Investment – money to buy land, machine & building
  • Foreign Investment – made by MNC – to earn profit
  • MNC brings latest technology for production
  • MNC provides money for investment (huge wealth)
  • Cargill foods bought Indian Parakh foods – now Cargill (largest edible oil producer in India with 5 million pouches daily)
  • MNC place order with small producers – garment, footwear – determine price, quality, delivery, and labor conditions
  • With dispersed production locations are interlinked

Foreign Trade

  • Producer reach beyond domestic market
  • Buyers expand choice of goods beyond what is produced domestically
  • Chinese toys in India – cheaper, competitive, replaced Indian market
  • Choice for goods arises – price stabilizes
  • It connects and integrates market.

Globalization

  • Ford – manufactures for India and exports
  • More trade + more investment + more integration or interconnection
  • What moves? Goods, services, investment & technology
  • Why people move? Job, education & income

Globalization

  • Interdependence of world՚s economies
  • Globalization + Connectivity & Digitization = Innovation & Value Creation
  • Prior – Trade (export of raw material & import of finished product)

Technology – Enabled Globalization

  • Containers for transport
  • Movement of goods and services
  • ICT – telecom, computers, internet (e-mail or voice talk – negligible cost) , satellite devices
  • Payment wallets and e-banking (upcoming)

Liberalization

  • What if taxes on import of toys from China?
  • Trade barrier – taxes on import – govt. use to foreign trade
  • Quota – limit number of goods imported
  • India had trade restrictions till 1950 - 60s to protect local artisans
  • Only essential item imports were allowed (fertilizer, petroleum)
  • 1991- policy changes – LPG – compete globally to improve performance
  • No barrier on foreign trade – easy imports and exports – removing barriers - liberalization

WTO

  • Free trade and liberalize trade – WTO
  • Formed - 1st Jan 1955
  • Headquarters – Geneva, Switzerland
  • Members – 164 states
  • Under Marakkesh Agreement – replaced GATT (General Agreement on Tariffs & Trade)
  • Focus on Doha rounds – for developing nations
  • Developed nations – unfairly retained trade barriers
  • Forced developing nations to remove trade barriers (US farmers paid huge sum of money by govt. – bring in cheap produce & is unfair)

Impact on India

  • Customers – Greater choice, improved quality & low price
  • Investment of MNCs increased – cell phone, automobile, electronics
  • Creation of new jobs
  • SEZs – with world class facilities to attract investors
  • Flexibility in labor laws – hire for short period when more work pressure
  • Investment in new technology and higher production standards
  • Indian companies as MNCs - Tata Motors (automobiles) , Infosys (IT) , Ranbaxy (medicines) , Asian Paints (paints) , Sundaram Fasteners (nuts & bolts)
  • Host of services like data entry, accounting, administrative tasks, engineering

Negative Impact on India

  • Lesser job security
  • Workers employed flexibly
  • Long work hours & night shifts

What is the AIM?

  • Fair globalization – opportunity for all
  • Proper implementation of labor laws

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