What is Globalisation?
Globalisation is the rapid integration or interconnection between countries mostly on the economic plane. In other words
Globalisation means integrating our economy with the world economy.
So, Globalisation is the interconnection between countries. Now let us see how countries are interconnected.
1. MNCs are spreading their base and setting up factories or companies in other countries where labour is cheap.
2. There is huge foreign investments and transfer of latest technology.
3. Movement of people between countries increases due to globalisation.
The credit for globalisation rests entirely with MNCs. The investment made by these companies has raised the economic status
of many developing countries.
Foreign trade between countries has also risen rapidly. The activities of most MNCs involve trade in goods and also services.
Factors that enabled Globalisation
Factor 1 - Technology
Rapid improvement in technology has been one major factor that has stimulated the globalisation process.
(a) Transportation Technology
The dramatic improvement in transportation technology has played a vital role in faster delivery of goods across long distances
at lower costs and in the movement of people from one country to another in a short time. As the basis of globalisation is
foreign trade and foreign investment (MNCs) movement of goods and people are vital for globalisation.
Globalisation is the result of greater foreign investment and greater foreign trade.
Comment
(b) Information and Communication Technology
Information and communication technology (or IT in short) has played a major role in spreading out production of services
across countries. Many MNCs are service based companies therefore the transfer of information is very vital to them.
Computers , internet facilities, telegraph, telephones mobile phones, and fax are used to contact one another around the world,
to access information instantly, and to communicate from remote areas. This has been facilitated by satellite communication
devices. Internet also allows us to send instant electronic mail (e-mail) and talk (voice-mail) across the world at negligible
costs.
Factor 2 - Liberalisation of foreign trade and investment policy
Liberalisation of foreign trade and investment policy is removing barriers or restrictions set by the government .
(a) Removing Trade Barriers
When the government on imports imposes tax it is called a trade barrier. Governments use trade barriers to increase or
decrease (regulate) foreign trade and to decide what kinds of goods and how much of each, should come into the country. The
Indian government, after Independence, had put barriers to foreign trade and foreign investment. This was considered
necessary to protect the producers within the country from foreign competition.
During the end of the 20 century, India removed trade barriers and Indian producers were allowed to compete with producers
around the globe.
(b) Liberalisation of investment policies
Barriers on foreign investment were also removed to a large extent enabling many MNCs to set up their factories in India.
Thus the rapid improvement in technology and the liberalization of foreign policies paved the way for globalisation in India.
Positive Impact of Globalisation in India
Globalisation and the Indian Economy Everonn The impact of globalisation in India has been tremendous. 1. Greater competition among producers resulting from Globalisation is a great advantage to consumers as there is greater choice before them. Consumers now enjoy improved quality and lower prices for several products. 2. Due to globalisation many MNCs have increased their investments in India . This means thousands of people are getting highly paid jobs and, enjoy much higher standards of living than was possible earlier. 3. Local companies supplying raw materials, to these industries have prospered. 4. Top Indian Companies have benefit from increased competition. They have invested in newer technology and production methods and raised their production standards. 5. Some Indian companies have gained from successful collaborations with foreign companies. 6. Large Indian companies have emerged as multinationals like Tata Motors. 7. Globalisation has also created new opportunities for Indian companies providing services, particularly in the IT field. Services such as data entry, accounting, and administrative tasks, are now being done cheaply in India and exported to the developed countries. This has generated thousands of jobs.
Negative Impact of Globalisation in India
There is also a negative side to globalisation in India. For a large number of small producers and workers globalisation has posed major challenges. Let us look into reasons for this negative impact: 1. Rising Competition Liberalisation of Foreign Trade policies allowed the import of electronic goods at a very cheap cost. Local producers of electronic goods were not able to meet with this challenge. MNCs flooded the market with quality products at a cheap price. Local producer are not able to compete with this and are put to hardship, as their goods do not have a market. 2. Uncertain Employment In order to compete in the world market exporters try and cut labour costs. Workers are denied their fair share of benefits as manufacturers are always on the look out for cheaper labour
Globalisation is the rapid integration or interconnection between countries mostly on the economic plane. In other words
Globalisation means integrating our economy with the world economy.
So, Globalisation is the interconnection between countries. Now let us see how countries are interconnected.
1. MNCs are spreading their base and setting up factories or companies in other countries where labour is cheap.
2. There is huge foreign investments and transfer of latest technology.
3. Movement of people between countries increases due to globalisation.
The credit for globalisation rests entirely with MNCs. The investment made by these companies has raised the economic status
of many developing countries.
Foreign trade between countries has also risen rapidly. The activities of most MNCs involve trade in goods and also services.
Factors that enabled Globalisation
Factor 1 - Technology
Rapid improvement in technology has been one major factor that has stimulated the globalisation process.
(a) Transportation Technology
The dramatic improvement in transportation technology has played a vital role in faster delivery of goods across long distances
at lower costs and in the movement of people from one country to another in a short time. As the basis of globalisation is
foreign trade and foreign investment (MNCs) movement of goods and people are vital for globalisation.
Globalisation is the result of greater foreign investment and greater foreign trade.
Comment
(b) Information and Communication Technology
Information and communication technology (or IT in short) has played a major role in spreading out production of services
across countries. Many MNCs are service based companies therefore the transfer of information is very vital to them.
Computers , internet facilities, telegraph, telephones mobile phones, and fax are used to contact one another around the world,
to access information instantly, and to communicate from remote areas. This has been facilitated by satellite communication
devices. Internet also allows us to send instant electronic mail (e-mail) and talk (voice-mail) across the world at negligible
costs.
Factor 2 - Liberalisation of foreign trade and investment policy
Liberalisation of foreign trade and investment policy is removing barriers or restrictions set by the government .
(a) Removing Trade Barriers
When the government on imports imposes tax it is called a trade barrier. Governments use trade barriers to increase or
decrease (regulate) foreign trade and to decide what kinds of goods and how much of each, should come into the country. The
Indian government, after Independence, had put barriers to foreign trade and foreign investment. This was considered
necessary to protect the producers within the country from foreign competition.
During the end of the 20 century, India removed trade barriers and Indian producers were allowed to compete with producers
around the globe.
(b) Liberalisation of investment policies
Barriers on foreign investment were also removed to a large extent enabling many MNCs to set up their factories in India.
Thus the rapid improvement in technology and the liberalization of foreign policies paved the way for globalisation in India.
Positive Impact of Globalisation in India
Globalisation and the Indian Economy Everonn The impact of globalisation in India has been tremendous. 1. Greater competition among producers resulting from Globalisation is a great advantage to consumers as there is greater choice before them. Consumers now enjoy improved quality and lower prices for several products. 2. Due to globalisation many MNCs have increased their investments in India . This means thousands of people are getting highly paid jobs and, enjoy much higher standards of living than was possible earlier. 3. Local companies supplying raw materials, to these industries have prospered. 4. Top Indian Companies have benefit from increased competition. They have invested in newer technology and production methods and raised their production standards. 5. Some Indian companies have gained from successful collaborations with foreign companies. 6. Large Indian companies have emerged as multinationals like Tata Motors. 7. Globalisation has also created new opportunities for Indian companies providing services, particularly in the IT field. Services such as data entry, accounting, and administrative tasks, are now being done cheaply in India and exported to the developed countries. This has generated thousands of jobs.
Negative Impact of Globalisation in India
There is also a negative side to globalisation in India. For a large number of small producers and workers globalisation has posed major challenges. Let us look into reasons for this negative impact: 1. Rising Competition Liberalisation of Foreign Trade policies allowed the import of electronic goods at a very cheap cost. Local producers of electronic goods were not able to meet with this challenge. MNCs flooded the market with quality products at a cheap price. Local producer are not able to compete with this and are put to hardship, as their goods do not have a market. 2. Uncertain Employment In order to compete in the world market exporters try and cut labour costs. Workers are denied their fair share of benefits as manufacturers are always on the look out for cheaper labour
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