👨🏫 Teacher's Insight
Class, globalisation isn't just about foreign products in Indian markets. It's about India becoming part of global production networks, with complex winners and losers.
💡 Integration with Unequal Benefits
Globalisation connects markets worldwide, but the benefits aren't evenly distributed. Some Indian companies become global champions, while some workers face job insecurity. Understanding this uneven impact is key.
1. What Globalisation Actually Means
Four interconnected dimensions:
1. Trade: Goods and services crossing borders (biggest part)
2. Investment: Foreign companies investing in India (FDI), Indians investing abroad
3. Technology: Communication revolution enables above
4. Movement: People moving for work, education, tourism
• Key driver: Technology (internet, containers, airplanes) made it affordable
• Indian experience: Gradual opening since 1991, accelerated recently
Four interconnected dimensions:
1. Trade: Goods and services crossing borders (biggest part)
2. Investment: Foreign companies investing in India (FDI), Indians investing abroad
3. Technology: Communication revolution enables above
4. Movement: People moving for work, education, tourism
• Key driver: Technology (internet, containers, airplanes) made it affordable
• Indian experience: Gradual opening since 1991, accelerated recently
2. Pre-1991: Why India Closed Its Economy
Historical context matters:
• Colonial experience: Raw materials exported, finished goods imported = deindustrialisation
• Post-independence fear: Dependency on foreign countries
• Strategy: Import substitution (make everything domestically)
• Tools: High tariffs, import licenses, foreign exchange controls
• Results mixed: Some industries developed, but inefficient, poor quality, limited choice
• Crisis 1991: Foreign exchange reserves for 3 weeks → forced change
Historical context matters:
• Colonial experience: Raw materials exported, finished goods imported = deindustrialisation
• Post-independence fear: Dependency on foreign countries
• Strategy: Import substitution (make everything domestically)
• Tools: High tariffs, import licenses, foreign exchange controls
• Results mixed: Some industries developed, but inefficient, poor quality, limited choice
• Crisis 1991: Foreign exchange reserves for 3 weeks → forced change
3. 1991 Reforms – Not Just "Opening Up"
Three pillars of reforms:
1. Liberalisation: Removing license raj, reducing controls
2. Privatisation: Selling public sector units
3. Globalisation: Integrating with world economy
• Key changes: Reduced tariffs, allowed FDI, currency convertibility
• Impact: More choices, better quality, competition, some industries struggled
• Debate continues: Speed was right? Should have protected more?
Three pillars of reforms:
1. Liberalisation: Removing license raj, reducing controls
2. Privatisation: Selling public sector units
3. Globalisation: Integrating with world economy
• Key changes: Reduced tariffs, allowed FDI, currency convertibility
• Impact: More choices, better quality, competition, some industries struggled
• Debate continues: Speed was right? Should have protected more?
4. WTO – Not Just Another Organisation
Understand its role:
• Established: 1995, replacing GATT
• Purpose: Rules for international trade, dispute settlement
• Principles: Most Favoured Nation (MFN), National Treatment
• Indian concerns: Agriculture subsidies, patent laws (TRIPS), services
• Current status: Doha Round stalled, regional agreements increasing
• India's stance:
Understand its role:
• Established: 1995, replacing GATT
• Purpose: Rules for international trade, dispute settlement
• Principles: Most Favoured Nation (MFN), National Treatment
• Indian concerns: Agriculture subsidies, patent laws (TRIPS), services
• Current status: Doha Round stalled, regional agreements increasing
• India's stance:
5. MNCs – Beyond "Foreign Companies"
Changing role:
• Old model: Produce abroad, sell in India (Coca Cola, Unilever)
• New model: Global production networks (design, parts, assembly across countries)
• Indian companies globalising: Tata, Infosys, Mittal, Sun Pharma
• Benefits: • Concerns: Profit repatriation, small business competition, cultural influence
• Current trends: Chinese investment, digital companies, manufacturing push
Changing role:
• Old model: Produce abroad, sell in India (Coca Cola, Unilever)
• New model: Global production networks (design, parts, assembly across countries)
• Indian companies globalising: Tata, Infosys, Mittal, Sun Pharma
• Benefits: • Concerns: Profit repatriation, small business competition, cultural influence
• Current trends: Chinese investment, digital companies, manufacturing push
6. Common Conceptual Errors
• Thinking "globalisation = westernisation" (India also influences world—yoga, IT, films)
• Believing "all foreign investment is good" (depends on sector, terms, technology transfer)
• Confusing "liberalisation" with "globalisation" (liberalisation domestic, globalisation international)
• Saying "pre-1991 India had no global links" (had trade, but restricted)
• Missing that globalisation affects different regions differently (coastal areas benefit more)
• Overlooking that consumers and producers experience globalisation differently
• Thinking "globalisation = westernisation" (India also influences world—yoga, IT, films)
• Believing "all foreign investment is good" (depends on sector, terms, technology transfer)
• Confusing "liberalisation" with "globalisation" (liberalisation domestic, globalisation international)
• Saying "pre-1991 India had no global links" (had trade, but restricted)
• Missing that globalisation affects different regions differently (coastal areas benefit more)
• Overlooking that consumers and producers experience globalisation differently
7. Answer Structure for "Impact Analysis"
Balanced assessment needed:
1. Positive impacts: Consumer choice, quality, technology, exports, investment
2. Negative impacts: 3. Sectoral variations: IT services gained, some manufacturing struggled
4. Regional variations: Urban/coastal benefited more than rural/interior
5. Government response needed: 6. Current challenges: Protectionism in West, China competition, pandemic disruptions
7. Conclusion: Globalisation inevitable but must be managed for fair benefits
Balanced assessment needed:
1. Positive impacts: Consumer choice, quality, technology, exports, investment
2. Negative impacts: 3. Sectoral variations: IT services gained, some manufacturing struggled
4. Regional variations: Urban/coastal benefited more than rural/interior
5. Government response needed: 6. Current challenges: Protectionism in West, China competition, pandemic disruptions
7. Conclusion: Globalisation inevitable but must be managed for fair benefits
8. Current Globalisation Debates
Link to present:
• Deglobalisation/ slowbalisation trends
• US-China trade war impacts
• Pandemic supply chain disruptions
• Atmanirbhar Bharat vs global integration
• Digital globalisation (data flows, platform companies)
• Climate change and global cooperation needs
• Free Trade Agreements (RCEP, India's stance)
• Global minimum tax agreement
Mention specific recent events for relevance.
Link to present:
• Deglobalisation/ slowbalisation trends
• US-China trade war impacts
• Pandemic supply chain disruptions
• Atmanirbhar Bharat vs global integration
• Digital globalisation (data flows, platform companies)
• Climate change and global cooperation needs
• Free Trade Agreements (RCEP, India's stance)
• Global minimum tax agreement
Mention specific recent events for relevance.
9. The Fair Globalisation Challenge
How to make it work for all:
• Government policies: Labor laws, environmental standards, competition policy
• International cooperation: Tax avoidance prevention, labor standards
• Domestic preparation: Education, healthcare, social security
• Indian opportunities: • Indian challenges: Infrastructure, regulatory clarity, skill gaps
• Future direction:
How to make it work for all:
• Government policies: Labor laws, environmental standards, competition policy
• International cooperation: Tax avoidance prevention, labor standards
• Domestic preparation: Education, healthcare, social security
• Indian opportunities: • Indian challenges: Infrastructure, regulatory clarity, skill gaps
• Future direction:
10. Revision Essentials
Must know:
1. What globalisation means (trade, investment, technology, movement)
2. Why India closed economy pre-1991
3. 1991 reforms and their impact
4. WTO role and India's concerns
5. MNCs role positive and negative
6. Impact on different groups (consumers, workers, producers)
7. Government measures to make globalisation fairer
8. Current globalisation debates
9. Connect to previous chapters (sectors affected differently by globalisation)
Must know:
1. What globalisation means (trade, investment, technology, movement)
2. Why India closed economy pre-1991
3. 1991 reforms and their impact
4. WTO role and India's concerns
5. MNCs role positive and negative
6. Impact on different groups (consumers, workers, producers)
7. Government measures to make globalisation fairer
8. Current globalisation debates
9. Connect to previous chapters (sectors affected differently by globalisation)
🌐 Quick Globalisation Guide
When concepts overwhelm:
Globalisation dimensions? → Things moving (trade), Money moving (investment), Ideas moving (tech), People moving
1991 reforms? → Reduce controls (liberalisation) + Sell PSUs (privatisation) + Open to world (globalisation)
WTO purpose? → Trade rules + Settle disputes + (try to) help developing countries
MNCs impact? → Bring investment/tech BUT may hurt local businesses
Fair globalisation? → Benefits spread widely, not just to few
Remember: Globalisation is like monsoon—can bring prosperity or destruction depending on preparation.
In a connected world, prosperity depends on both participating globally and strengthening domestically.
– Your Economics Teacher
Guided Path Noida
