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NCERT Solutions
Globalization and the Indian Economy
Madhya Pradesh Board · Class 10 · Social Science
NCERT Solutions for Globalization and the Indian Economy — Madhya Pradesh Board Class 10 Social Science.
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1Complete the following statement to show how the production process in the garment industry is spread across countries.Show solution
The garment company may, for example, get cotton fibre from Korea, buttons from France, zips from Japan, designing from the USA, and stitching done in Thailand.
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1.1. Would you say Ford Motors is a MNC? Why?Show solution
Yes. A MNC is a company that owns or controls production in more than one nation. Ford Motors has production spread over 26 countries, including India, so it is a multinational corporation.
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2.2. What is foreign investment? How much did Ford Motors invest in India?Show solution
Investment is the money spent to buy assets such as land, buildings, machines and other equipment. When this investment is made by MNCs in another country, it is called foreign investment. Ford Motors spent Rs. 1700 crore to set up its plant near Chennai.
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3.3. By setting up their production plants in India, MNCs such as Ford Motors tap the advantage not only of the large markets that countries such as India provide, but also the lower costs of production. Explain the statement.Show solution
Ford Motors gains in two ways. First, India provides a large market with many buyers. Second, production in India can be done at lower cost because of cheaper labour and other resources. So the company can sell more and earn higher profits.
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4.4. Why do you think the company wants to develop India as a base for manufacturing car components for its global operations? Discuss the following factors:Show solution
The company may choose India because:
- (a) Cost of labour and other resources is low, which reduces production cost.
- (b) Local manufacturers already supply many auto-parts, so the company can get components easily.
- (c) Closeness to large markets such as India and China helps in selling and supplying components quickly.
All these factors make India useful as a base for global operations.
- (a) Cost of labour and other resources is low, which reduces production cost.
- (b) Local manufacturers already supply many auto-parts, so the company can get components easily.
- (c) Closeness to large markets such as India and China helps in selling and supplying components quickly.
All these factors make India useful as a base for global operations.
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5.5. In what ways will the production of cars by Ford Motors in India lead to interlinking of production?Show solution
It leads to interlinking of production because Ford can use Indian factories and local suppliers for parts, assemble cars in India, and then sell them in India and abroad. Thus production becomes spread across countries and connected in a single network.
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6.6. In what ways is a MNC different from other companies?Show solution
A MNC differs from other companies because it operates in more than one country and controls production across borders. It may set up factories, buy existing companies, form partnerships, or get goods produced by small producers while controlling price, quality and delivery.
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7.7. Nearly all major multinationals are American, Japanese or European, such as Nike, Coca-Cola, Pepsi, Honda, Nokia. Can you guess why?Show solution
The chapter says that many major MNCs are American, Japanese or European. A school-level reason is that these countries are economically advanced, have big companies, and have had a long history of industrial development and technology, so their firms became multinational earlier.
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1.1. What was the main channel connecting countries in the past? How is it different now?Show solution
Earlier, trade was the main link between countries. Now, countries are linked by foreign trade, foreign investment, MNCs, and the movement of goods, services, investments and technology across borders.
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2.2. Distinguish between foreign trade and foreign investment.Show solution
Foreign trade is the exchange of goods across national borders. Foreign investment is when money is spent by an MNC to buy or create assets in another country, such as land, buildings, machines and equipment.
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3.3. In recent years China has been importing steel from India. Explain how the import of steel by China will affect.Show solution
If China imports steel from India:
- (a) Steel companies in China face competition from imported steel and may lose sales.
- (b) Steel companies in India gain a new market and may increase output.
- (c) Industries in China using steel may get steel at lower prices and with more choice, helping their production.
- (a) Steel companies in China face competition from imported steel and may lose sales.
- (b) Steel companies in India gain a new market and may increase output.
- (c) Industries in China using steel may get steel at lower prices and with more choice, helping their production.
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4.4. How will the import of steel from India into the Chinese markets lead to integration of markets for steel in the two countries? Explain.Show solution
When steel is imported from India into China, the two markets begin to affect each other. Choice increases, producers in both countries compete, and prices in one market influence the other. This is how markets become integrated.
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1.1. What is the role of MNCs in the globalisation process?Show solution
MNCs are the main force behind globalisation. They set up production in different countries, invest money abroad, buy local companies, place orders with small producers, and connect countries through trade in goods and services.
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2.2. What are the various ways in which countries can be linked?Show solution
The chapter says countries are connected by the movement of goods, services, investments and technology. People also move between countries, though not as much because of restrictions.
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3.3. Choose the correct option.
Globalisation, by connecting countries, shall result inShow solution
Globalisation connects countries, so producers from different countries compete with one another. Therefore the correct option is greater competition among producers.
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1.1. In the above example, underline the words describing the use of technology in production.Show solution
The words describing the use of technology in production are telecommunications, computers, Internet, satellite communication devices, e-mail, voice-mail.
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2.2. How is information technology connected with globalisation? Would globalisation have been possible without expansion of IT?Show solution
Information technology (IT) helps globalisation by making communication and transfer of information very fast and cheap. It allows designing, customer care, banking, and many services to be done across countries. Without the growth of IT, globalisation would not have developed in the same way or at the same speed.
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1.1. What do you understand by liberalisation of foreign trade?Show solution
Liberalisation means removing the trade barriers or restrictions placed by the government. After liberalisation, businesses can decide more freely what to import and export, and foreign companies can set up production more easily.
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2.2. Tax on imports is one type of trade barrier. The government could also place a limit on the number of goods that can be imported. This is known as quotas. Can you explain, using the example of Chinese toys, how quotas can be used as trade barriers? Do you think this should be used? Discuss.Show solution
If the government fixes a quota, only a limited number of Chinese toys can enter India. Then supply will fall, Chinese toys will be less available, and Indian toy makers may face less competition. Such barriers can protect domestic producers, but whether they should be used depends on whether the aim is protection or freer competition.
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1.1. Fill in the blanks.
WTO was started at the initiative of __________ countries. The aim of the WTO is to __________. WTO establishes rules regarding __________ for all countries, and sees that __________. In practice, trade between countries is not __________. Developing countries like India have __________, whereas developed countries, in many cases, have continued to provide protection to their producers.Show solution
Fill in the blanks as follows:
WTO was started at the initiative of developed countries. The aim of the WTO is to liberalise international trade. WTO establishes rules regarding international trade for all countries, and sees that these rules are obeyed. In practice, trade between countries is not free. Developing countries like India have reduced trade barriers, whereas developed countries, in many cases, have continued to provide protection to their producers.
WTO was started at the initiative of developed countries. The aim of the WTO is to liberalise international trade. WTO establishes rules regarding international trade for all countries, and sees that these rules are obeyed. In practice, trade between countries is not free. Developing countries like India have reduced trade barriers, whereas developed countries, in many cases, have continued to provide protection to their producers.
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2.2. What do you think can be done so that trade between countries is more fair?Show solution
To make trade more fair, countries should have fairer WTO rules, and developed countries should stop giving huge support to their producers while asking developing countries to remove barriers. Developing countries can also work together to demand fair treatment.
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3.3. In the above example, we saw that the US government gives massive sums of money to farmers for production. At times, governments also give support to promote production of certain types of goods, such as those which are environmentally friendly. Discuss whether these are fair or not.Show solution
Such support can be justified when it promotes environmentally friendly production and serves a public interest. However, it should be fair and transparent and not become a way of unfairly helping domestic producers to dominate world markets.
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1.1. How has competition benefited people in India?Show solution
Greater competition among local and foreign producers has helped consumers, especially the better-off urban sections. They now get more choice, improved quality and lower prices for many goods, so their standard of living has improved.
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2.2. Should more Indian companies emerge as MNCs? How would it benefit the people in the country?
3.3. Why do governments try to attract more foreign investment?
4.4. In Chapter 1, we saw what may be development for one may be destructive for others. The setting of SEZs has been opposed by some people in India. Find out who are these people and why are they opposing it.
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1.1. What are the ways in which Ravi's small production unit was affected by rising competition?
2.2. Should producers such as Ravi stop production because their cost of production is higher compared to producers in other countries? What do you think?
3.3. Recent studies point out that small producers in India need three things to compete better in the market (a) better roads, power, water, raw materials, marketing and information network (b) improvements and modernisation of technology (c) timely availability of credit at reasonable interest rates.
- Can you explain how these three things would help Indian producers?
- Do you think MNCs will be interested in investing in these? Why?
- Do you think the government has a role in making these facilities available? Why?
- Can you think of any other step that the government could take? Discuss.
- Can you explain how these three things would help Indian producers?
- Do you think MNCs will be interested in investing in these? Why?
- Do you think the government has a role in making these facilities available? Why?
- Can you think of any other step that the government could take? Discuss.
LET'S WORK THESE OUT
1.1. In what ways has competition affected workers, Indian exporters and foreign MNCs in the garment industry?
2.2. What can be done by each of the following so that the workers can get a fair share of benefits brought by globalisation?
(a) government
(b) employers at the exporting factories
(c) MNCs
(d) workers.
(a) government
(b) employers at the exporting factories
(c) MNCs
(d) workers.
3.3. One of the present debates in India is whether companies should have flexible policies for employment. Based on what you have read in the chapter, summarise the point of view of the employers and workers.
EXERCISES
1What do you understand by globalisation? Explain in your own words.
2What were the reasons for putting barriers to foreign trade and foreign investment by the Indian government? Why did it wish to remove these barriers?
3How would flexibility in labour laws help companies?
4What are the various ways in which MNCs set up, control or produce in other countries?
5Why do developed countries want developing countries to liberalise their trade and investment? What do you think should the developing countries demand in return?
6"The impact of globalisation has not been uniform." Explain this statement.
7How has liberalisation of trade and investment policies helped the globalisation process?
8How does foreign trade lead to integration of markets across countries? Explain with an example other than those given here.
9Globalisation will continue in the future. Can you imagine what the world would be like twenty years from now? Give reasons for your answer.
10Supposing you find two people arguing: One is saying globalisation has hurt our country's development. The other is telling, globalisation is helping India develop. How would you respond to these arguments?
11Fill in the blanks.
Indian buyers have a greater choice of goods than they did two decades back. This is closely associated with the process of __________. Markets in India are selling goods produced in many other countries. This means there is increasing __________ with other countries. Moreover, the rising number of brands that we see in the markets might be produced by MNCs in India. MNCs are investing in India because __________. While consumers have more choices in the market, the effect of rising __________ and __________ has meant greater __________ among the producers.
Indian buyers have a greater choice of goods than they did two decades back. This is closely associated with the process of __________. Markets in India are selling goods produced in many other countries. This means there is increasing __________ with other countries. Moreover, the rising number of brands that we see in the markets might be produced by MNCs in India. MNCs are investing in India because __________. While consumers have more choices in the market, the effect of rising __________ and __________ has meant greater __________ among the producers.
12Match the following.
13Choose the most appropriate option.
(i) The past two decades of globalisation has seen rapid movements in
(a) goods, services and people between countries.
(b) goods, services and investments between countries.
(c) goods, investments and people between countries.
(ii) The most common route for investments by MNCs in countries around the world is to
(a) set up new factories.
(b) buy existing local companies.
(c) form partnerships with local companies.
(iii) Globalisation has led to improvement in living conditions
(a) of all the people
(b) of people in the developed countries
(c) of workers in the developing countries
(d) none of the above
(i) The past two decades of globalisation has seen rapid movements in
(a) goods, services and people between countries.
(b) goods, services and investments between countries.
(c) goods, investments and people between countries.
(ii) The most common route for investments by MNCs in countries around the world is to
(a) set up new factories.
(b) buy existing local companies.
(c) form partnerships with local companies.
(iii) Globalisation has led to improvement in living conditions
(a) of all the people
(b) of people in the developed countries
(c) of workers in the developing countries
(d) none of the above
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