Page 108 - Understanding Economics for Class 10

IMPAct oF GLoBALIsAtIon In IndIA
Globalisation of the Indian economy has come a long way in the last twenty years. It has affected
the lives of the people in many ways:
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 Globalisation and greater competition among producers - both local and foreign producers
 It has proved to be advantageous to consumers specially the well-off people in urban
areas. More choices of goods at lower price and of improved quality are available to
these consumers.
 Hence, better standard of living is enjoyed by these people than earlier.
The impact of Globalisation has not been uniformed among producers and workers.
 Firstly, investing in India has proved to be beneficial for MNCs. This is shown by increased
investments in India over the past 20 years.
 The main industries in which MNCs are interested are cell phones, automobiles, electronics,
soft drinks, fast food or services such as banking in urban areas. These products are mainly
demanded by well-off buyers.
 In these industries and services, new jobs have been created. Also, local companies
supplying raw materials, etc. to these industries have prospered.
 More over, because of the increased competition several of the top Indian companies have
been able to get benefit.
 Their production standards have raised by investing in newer technology and production
methods.
 Successful partnerships with foreign companies have proven beneficial for certain individuals
or entities.
 Some large Indian companies have emerged as multinationals due to globalisation.
 Tata Motors (automobiles), Infosys (IT), ranbaxy (medicines), Asian Paints (paints),
Sundaram Fasteners (nuts and bolts) are some Indian companies which are spreading their
operations worldwide.
 New opportunities have been created for companies providing services, particularly those
involving IT due to globalisation.
 Examples are: The Indian company producing a magazine for the London based company
and call centres. Some services are also provided in India at cheaper rates and then
exported to the developed countries such as data entry, accounting, administrative tasks
and engineering.

Steps to Attract Foreign Investment
 various steps have been taken by Indian government in recent years to attract foreign
companies to invest in India.
 Special Economic Zones (SEZs) are being established as advanced industrial hubs that offer
exceptional infrastructure, encompassing top-notch amenities such as reliable electricity,
abundant water supply, well-maintained roads, efficient transportation systems, ample
storage facilities, and a host of recreational and educational resources. A notable advantage
of operating within these SEZs is that companies that choose to establish their production
units there are granted a tax exemption for an initial period of five years.
 To attract foreign investment, flexibility in labour laws is also allowed by government.
 The government has allowed companies to ignore certain rules that aim to protect the
workers’ In the recent years.
E-94 Economics Class X