INTRODUCTION

INTRODUCTION

Most regions of the world are getting increasingly interconnected. While this interconnectedness across countries has many dimensions — cultural, political, social and economic — this chapter looks at globalisation in a more limited sense. It defines globalisation as the integration between countries through foreign trade and foreign investments by multinational corporations (MNCs). As you will notice, the more complex issues of portfolio investment have been left out.

If we look at the past thirty years or so, we find that MNCs have been a major force in the globalisation process connecting distant regions of the world. Why are the MNCs spreading their production to other countries and what are the ways in which they are doing so? Rather than relying on quantitative estimates, the rapid rise and influence of the MNCs has been shown through a variety of examples, mainly drawn from the Indian context. 

Integration of production and integration of markets is a key idea behind understanding the process of globalisation and its impact. 

Globalisation has been facilitated by several factors. Three of these have been highlighted: rapid improvements in technology, liberalisation of trade and investment policies and, pressures from international organisations such as the WTO. A role-play could be conceived to compare and contrast the pre and post-liberalisation era. 

As consumers in today’s world, some of us have a wide choice of goods and services before us. The latest models of digital cameras, mobile phones and televisions made by the leading manufacturers of the world are within our reach. Every season, new models of automobiles can be seen on Indian roads. Gone are the days when Ambassador and Fiat were the only cars on Indian roads. Today, Indians are buying cars produced by nearly all the top companies in the world. A similar explosion of brands can be seen for many other goods: from shirts to televisions to processed fruit juices.

Such a wide-ranging choice of goods in our markets is a relatively recent phenomenon. You wouldn’t have found such a wide variety of goods in Indian markets even two decades back. In a matter of years, our markets have been transformed!

How do we understand these rapid transformations? What are the factors that are bringing about these changes? And, how are these changes affecting the lives of the people? We shall dwell on these questions in this chapter.

Source: This topic is taken from NCERT TEXTBOOK