Cracking Globalization and the Indian Economy: Class 10 Notes Made Easy

Are you ready to delve into the fascinating world of globalization and its impact on the Indian economy? Buckle up, Class 10 economics students, because this blog post is your ultimate guide to mastering Chapter 4!

Whether you're aiming for a stellar score in your upcoming CBSE board exams or simply seeking to deepen your understanding, we've got you covered. This blog post offers a comprehensive set of Class 10 notes specifically tailored to demystify the intricate relationship between globalization and the Indian economy.

These clear, concise, and easy-to-follow notes, conveniently available in a downloadable PDF format, will guide you through key concepts like trade liberalization, foreign investment, and the impact of globalization on various sectors of the Indian economy.

globalization and the indian economy class 10 notes

SubjectSocial Science (Economics)
Class10
BoardCBSE and State Boards
Chapter No.4
Chapter NameGlobalization and the Indian Economy
TypeNotes
Session2023-24

"Whether you think you can or you think you can't, you're right."

- Henry Ford

Production Across Countries

Multinational Corporations (MNCs)

An MNC is a company that owns or controls production in more than one nation. MNCs set up offices and factories for production in regions where they can get cheap labor and other resources. This is done so that the cost of production is low and the MNCs can earn greater profits.

Interlinking Production Across Countries

Investment: The money that is spent to buy assets such as land, buildings, machines, and other equipment is called investment.

Foreign Investment: The investment made by MNCs is called foreign investment. It is done with the expectation of earning more profits by reducing the cost of production.

Multinational corporations adopt multiple strategies to spread their production:

  1. MNCs set up their production units in those areas where they can save on their cost of production.
  2. It sets up production jointly with some of the local companies of the selected countries.
  3. Sometimes large MNCs place orders for production with small producers, provide them money for additional investments and then sell the products under their brand name at much higher rates in foreign countries.
  4. Sometimes MNCs buy local companies and then expand their production.

The local companies are benefited by collaborating with multinational companies in the following ways:

  1. MNCs provide money for additional investments, like buying new machines for faster production.
  2. MNCs might bring with them the latest technology for production.

Foreign Trade and Integration of Markets

Foreign trade is the exchange of goods – purchase and sale – across geographical boundaries of countries.

  • Goods travel from one market to another.
  • The choice of goods available in the market increases.
  • Prices of similar goods in different markets tend to become equal.
  • Producers in two countries closely compete against each other even though they are separated by geographical boundaries.

What is Globalization?

Globalization is the process of rapid integration or interconnection between countries.

Role of MNCs in promoting globalization:

  • Goods and services are bought and sold at a global level.
  • Investments, technology, and people are moving between countries.
  • MNCs by foreign trade integrated the markets in the world.

Factors that have enabled Globalization

1. Technology

Rapid improvement in technology has stimulated the globalization process.

  • Improvements in transportation technology have made much faster delivery of goods across long distances possible at lower costs.
  • Even more remarkable have been the developments in information and communication technology.

Role of Information Technology in stimulating the process of globalization

  • Telecommunication facilities (telegraph, telephone including mobile phones, fax) are used to contact and access information.
  • Helps to communicate from remote areas.
  • This has been facilitated by satellite communication devices.
  • Computers have now entered almost every field of activity.
  • One can obtain and share information through the internet.
  • Electronic mail (e-mail) and talk (voice-mail) across the world at negligible costs.
  • Has played a major role in spreading out the production of services across countries.

2. Liberalization of foreign trade and foreign investment policy

Trade Barriers: Restrictions set by the government to increase or decrease (regulate) foreign trade is called trade barriers.

For example tax on imports, quotas (the government places a limit on the number of goods that can be imported), etc.

Reasons for putting trade barriers after independence:

  • Governments use trade barriers to regulate foreign trade.
  • Trade barriers were used to protect domestic industries from foreign competition.
  • The competition from foreign competitors could have crippled the newborn industries in India.

Liberalization: Removing barriers or restrictions set by the government is known as liberalization.

  • The Indian government wanted domestic producers to face global competition.
  • Completion would improve the quality of the goods.
  • International organizations supported this.

World Trade Organization

The main aim of WTO is to liberalize international trade.

Functions of WTO

  • It establishes rules regarding international trade and sees that these rules are obeyed.
  • To establish a forum for trade negotiations.
  • To handle trade disputes.

Impact of Globalization

Positive

  1. A wide variety of goods is now available to consumers.
  2. Good quality products are available at lower prices.
  3. New jobs are created in industries.
  4. Local companies have prospered by supplying raw materials to the industries.
  5. Top Indian companies like Tata Motors, Infosys, Ranbaxy, have emerged as MNCs.
  6. Some local companies have been able to invest in newer technology and production methods.

Negative

  1. Globalization may not help in achieving sustainable development
  2. It may lead to the widening of income inequalities among various countries.
  3. It may lead to greater dependence of underdeveloped countries on advanced countries.
  4. Flexibility in labor laws.
  5. Cut in farm subsidies.
  6. Closure of small industries.

The Struggle for a Fair Globalization

Fair Globalization

  • Would create opportunities for all,
  • Ensure the benefits of globalization are shared better.

Role of Government in ensuring Fair Globalization

  • Government policies must protect the interests, not only of the rich and the powerful but all the people in the country.
  • It should ensure that the labor laws are properly implemented and the workers get their rights.
  • It can support small producers to improve their performance till the time they become strong enough to compete. If necessary, the government can use trade and investment barriers.
  • It can negotiate at the WTO for fairer rules.
  • It can also align with other developing countries with similar interests to fight against the domination of developed countries in the WTO.
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