Globalisation and the Indian Economy Class 10: Notes

Globalisation and the Indian Economy is chapter 4 of the Class 10 Economics book. Globalisation is the process of rapid integration or interconnection between countries, through the movement of goods, services, investment, technology and people. The chapter shows how multinational companies, foreign trade, technology and policy changes connect economies, and asks who gains and who loses.

For CBSE 2026-27, only two parts come in the board exam: "What is Globalisation?" and "Factors that have enabled Globalisation". The rest of the chapter is covered through an interdisciplinary project. This guide covers the full chapter but marks where your board marks are.

What the 2026-27 syllabus assesses

The WTO has its own section in the textbook, and the teacher's notes count pressure from bodies such as the WTO as one of three enabling factors, but the syllabus lists it under the project. Know the basics for both.

Production across countries: MNCs (project part)

Until the middle of the twentieth century, production was mostly organised within countries, and trade was the main link between them. Then multinational corporations (MNCs) grew.

An MNC is a company that owns or controls production in more than one country. MNCs set up offices and factories where they can get cheap labour and other resources and be close to markets, so their costs fall and profits rise. A product may be designed in one country, made in another and supported by customer care in a third.

How MNCs interlink production (project part)

Money spent on assets such as land, buildings and machines is investment. Investment made by MNCs is foreign investment.

Example: Cargill Foods, an American MNC, bought the Indian company Parakh Foods. Cargill is now the largest producer of edible oil in India, with a capacity to make 5 million pouches daily.

Foreign trade and integration of markets (project part)

Foreign trade lets producers sell beyond their own country and gives buyers more choice. Prices of similar goods in different markets tend to come closer, and producers in distant countries compete directly. This is integration of markets.

In the Chinese toys example, cheaper Chinese toys with new designs reached Indian markets. Buyers got more choice at lower prices, while Indian toy makers lost business.

What is globalisation? (board exam)

Globalisation is the process of rapid integration or interconnection between countries. More and more goods, services, investments and technology move between countries. People also move, for better income, jobs or education, but in the past few decades this movement has not increased much because of various restrictions.

MNCs play a major role. As they look for cheaper places to produce, they link the economies of different countries.

Factors that have enabled globalisation (board exam)

1. Technology

• Transport: faster and cheaper delivery over long distances. Goods are packed in containers that can be loaded onto ships, railways, planes and trucks, which lowers port handling costs and speeds up exports.
• Information and communication technology (ICT): telecommunications, computers and the internet let people share information instantly. This allows services to spread out. A magazine for London can be designed in Delhi, with text sent over the internet and payment made by e-banking; the printed copies still have to be transported.

2. Liberalisation of foreign trade and investment policy

A trade barrier, such as a tax on imports, is a restriction a government uses to regulate foreign trade. After independence, India kept barriers to protect its young industries from foreign competition. Starting around 1991, India removed many of them. Removing barriers set by the government is called liberalisation.

3. Pressure from the World Trade Organisation (a separate section in the textbook, listed under the project in 2026-27)

The WTO aims to liberalise international trade by setting rules and checking that members follow them. The textbook gives its membership as about 160 countries. Critics say developing countries have been made to remove trade barriers while developed countries kept them unfairly. The chapter's example: in the US, agriculture is about 1% of GDP and 0.5% of employment, yet US farmers receive large government support, which lets them sell cheaply and hurts farmers elsewhere.

Impact of globalisation in India (not in the 2026-27 board paper)

• Consumers, especially the well-off in cities, have more choice, better quality and lower prices.
• MNCs have invested in industries such as cell phones, automobiles, electronics, soft drinks, fast food and banking, creating new jobs.
• Top Indian companies have grown. Some, such as Tata Motors, Infosys and Ranbaxy, have become MNCs themselves.
• Special Economic Zones (SEZs) offer world-class facilities, and companies there do not pay taxes for the first five years.
• Small producers of goods such as batteries, capacitors, plastics and vegetable oil were hit hard by cheaper imports. In the chapter's story, Ravi's capacitor unit struggled after import restrictions were removed under India's 2001 WTO agreement.
• Workers are often hired "flexibly", on a temporary basis, without job security or benefits.

The struggle for a fair globalisation (project part)

Fair globalisation creates opportunities for all and shares the benefits better. The government can:

• make sure labour laws are implemented properly;
• support small producers until they can compete;
• use trade and investment barriers where needed;
• negotiate fairer rules at the WTO, together with other developing countries.

People's organisations and campaigns have also influenced decisions at the WTO.

Remember this

• Globalisation = rapid integration or interconnection between countries.
• MNCs are a major force behind it.
• Enabling factors: technology (transport, ICT) and liberalisation (plus the WTO).
• Trade barrier = a restriction such as a tax on imports.
• For 2026-27, board questions come from "What is Globalisation?" and "Factors that have enabled Globalisation".

Important questions with answers

1. Define globalisation. (1 mark) The process of rapid integration or interconnection between countries.

2. What is a trade barrier? Give an example. (1 mark) A restriction a government puts on foreign trade, such as a tax on imports.

3. What is liberalisation? (1 mark) Removing barriers or restrictions set by the government on trade and investment.

4. What moves between countries in globalisation? (3 marks) Goods, services, investments and technology, and to a lesser extent people. MNCs play a major role by spreading production across countries.

5. How has technology helped globalisation? (3 marks) Better transport, including containers, moves goods faster and more cheaply. Telecommunications, computers and the internet let information travel instantly, so services such as design can be done in one country for buyers in another.

6. Why did India put barriers on foreign trade after independence, and why were they removed? (3 marks) Barriers protected young Indian industries from foreign competition. Around 1991, the government decided Indian producers should compete with producers around the world, expecting competition to improve their performance, so many barriers were removed.

7. Explain the main factors that have enabled globalisation. (5 marks) First, rapid improvement in technology: transport technology such as containers and cheaper air transport made long-distance delivery fast and cheap, and information and communication technology let companies share information instantly and spread services across countries. Second, liberalisation of foreign trade and investment policy: from around 1991 India removed many barriers, so goods could be imported and exported easily and foreign companies could set up factories and offices. Third, pressure from international organisations such as the WTO, which sets rules for international trade and pushes countries to liberalise.

Common mistakes to avoid

• Defining globalisation only as foreign trade. It also covers investment, technology, services and people.
• Saying technology alone caused globalisation. Liberalisation of policy mattered too.
• Saying an MNC only sells abroad. It owns or controls production in more than one country.
• Spending most revision time on project parts. For the 2026-27 board paper, focus on the two assessed sections.

To practise these answers and test yourself, study this chapter with Joy.