Ans) Globalisation literally means integrating the economy with the world economy. In this, each nation has an unrestricted exchange of goods, services, capital and intellectual property with nations. It is actually based on the ideology of open economy in which public boundaries are not given much importance from the trade point of view between different nations of the world, but business transactions go on either freely or under limited control. Therefore it can be said that globalisation is a process under which all business actvities are internationalised and they start functioning as a unit.

Ans) “Foreign trade means the exchange of goods and services between two or more separate ruling nations.” If buyer and seller live in different ruling countries, then the buying and selling between them is called foreign trade. Thus, in foreign trade, goods cross the borders of one country and enter the borders of another country. For example, the trade between Bangladesh and India will be called foreign trade, there are three types of foreign trades.

1. Import Trade: Import trade means to get goods from other countries to our own country.
2. Export Trade: Export trade means to send goods from our country to foreign countries.
3. Import for export: When goods are not imported into one country from another country for local use but have been imported from there for the purpose of export to another country, such trade shall be referred to as “import for export”.

Ans)

1. Generally MNCs set up production where it is close to markets, where there is skilled and unskilled labour available at low costs, and where the availability of other factors of production is assured.
2. MNCs might look for government policies that look after their interests.
3. Having assured themselves of these conditions, MNCs set up factories and offices for production.

Ans) Development in Information and Communication Technology-In recent times, technology in the areas of telecommunications, computers, internet has been changing rapidly. Telecommunication facilities (telegraph, telephone including mobile phones, 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. Computers have now entered almost every field of activity. The amazing world of internet, where we can obtain and share information on almost anything we want to know. Internet also allows us to send instant electronic mail (E-mail) and talk (voice mail) across the world at negligible costs.

Ans) Globalisation has created new opportunities for companies providing services, particularly those involving IT. The Indian company publicising a magazine for the London-based company and call centres are some examples. Besides, a host of services such as data entry, accounting, administrative tasks, engineering are now being done cheaply in countries such as India and are exported to the developed countries.

On the other hand, small producers have been badly affected by globalisation. Small industries are not able ot compete with foreign produced goods. As a result, many small scale industries have closed down. The condition of batteries, plastic, toys, tyres, dairy products and edible oil is bad. It is noteworthy here that in India, after agriculture, most people are employed in small scale industries.

Ans) Liberalisation of trade and investment policies helped the globalisation process in following ways:-

(1) Globalisation is the process of rapid integration between different nations. This is becoming possible through greater foreign investment and foreign trade. MNCs are playing a major role in the process of globalisation. More and more MNCs are looking for places in the world which are more affordable for their production. As a result, production work is being organized in a complex manner.

(2) Technology, especially information technology (IT) play a major role in organizing production among nations. Also, liberalisation of trade and investment has facilitated globalisation by removing barriers to trade and investment. At the international level, the WTO has put pressure on developing nations to liberalise trade and investment.

Ans) Globalisaion is the need of present and future. If globalisation continues in the future, the world will be benefitted greatly from it. The benefits can be of many types:-

1. New employment opportunities will be created.
2. Companies will have benefit from increasing competition and some companies will be benefitted from joint venture.
3. All obstacles related to labour will be removed and the standard of living of the people in future will improve.
4. After 20 years from today, people will live with a relatively higher standard of living.

Ans) Government has allowed flexibility in the labour laws to attract foreign investment. The companies in the organised sector have to obey certain rules that aim to protect the workers’ right. In the recent years, the government has allowed companies to ignore many of these. Instead of hiring workers on a regular basis, companies hire workers in a flexible manner for short periods when there is intense pressure of work. This is done to reduce the cost of labour for the company.

Ans) The most common route for MNC investment is to buy up local companies and then to expand production. MNCs with huge wealth can quite easily do so. For example, Cargill Foods, a very large American MNC, has bought over smaller Indian companies such as Parakh Foods. Parakh Foods had built a large marketing network in various parts of India, where its brand were well-reputed.
Parakh Foods had four oil refineries, whose control has now shifted to Cargill. Cargill is now the largest producer of edible oil in India, with a capacity to make 50 lakh pouches daily.

Ans) For trade, Chinese Toys came into the Indian markets. In the competition between Indian and Chinese toys, Chinese toys prove better. Indian buyers have a greater choice of toys and at lower prices. For the Chinese toy makers, this provides an opportunity to expand business. The opposite is true for Indian toy makers. They face losses, as their toys are selling much less. Within a year, 70 to 80 percent of the toy shops have replaced indian toys with Chinese Toys.

Ans) Ford Motors, an American company, is one of the world’s largest automobile manufacturers with production spread over 26 countries of the world. Ford Motors came to India in 1995 and spent 1,700 crore to set up a large plant near Chennai. This of jeeps and trucks: By the year 2017, Ford Motors was selling 88,000 cars in the was done in collaboration with Mahindra and Mahindra; a major Indian manufacturer Indian markets, while 1,81,000 cars were exported from India to South Africa, Mexico, Brazil and Ford component supplying base for its other plants across the globe.

Ans) Goods are placed in containers that can be loaded intact onto ships, railways, planes, and trucks. Containers have led to huge reduction in port handling costs and increased the speed with which exports can reach markets. Similarly, the cost of air transport has fallen. This has enabled much greater volumes of goods being transported by airlines.

Ans) World Trade Organisation (WTO) is one such organisation whose aim is to liberalise international trade. Started at the initiative of the developed countries, WTO establishes rules regarding international trade and sees that these rules are obeyed. At present 164 countries of the world are currently members of the WTO.

Though WTO is supposed to allow free trade to all, in practice, it is seen that the developed countries have unfairly retained trade barriers. On the other hand, WTO rules have forced the developing countries to remove trade barriers. An example of this is the current debate on trade in agricultural products.

Ans)

1. Through technology exchange.
2. By exchange of services.
3. By movement of people between nations.
4. By exchange of investments.