Key Points

Globalisation is the process of rapid integration or interconnection between countries. This is happening through greater foreign trade and foreign investment by Multinational Corporations (MNCs).

An MNC is a company that owns or controls production in more than one nation. They are a major force in the globalisation process, setting up offices and factories worldwide to access cheap labour and resources.

Foreign investment is the money spent by an MNC to buy assets like land and machinery in another country. Foreign trade is the exchange of goods across countries, which helps in connecting and integrating markets.

MNCs control production by setting up joint ventures with local companies, buying local companies, or placing orders with small producers. This interlinks production across different countries.

Rapid improvements in transportation technology (like containers) and information and communication technology (like the internet) have been major factors enabling globalisation. They allow for faster delivery of goods and instant communication at lower costs.

Liberalisation is the removal of government-set barriers or restrictions on foreign trade and investment. India started this process around 1991, allowing goods to be imported and exported easily.

Trade barriers are restrictions on foreign trade, such as a tax on imports (tariff) or a limit on the quantity of goods that can be imported (quota). Before 1991, India used trade barriers to protect domestic producers from foreign competition.

The WTO is an international organisation that aims to liberalise international trade and establishes rules for it. It often puts pressure on developing countries to remove trade barriers.

Globalisation has benefited consumers with greater choice, improved quality, and lower prices. It has also created new jobs and enabled some large Indian companies to become multinationals themselves.

The impact of globalisation has not been uniform. Small producers have struggled to compete with cheaper imports and large MNCs, leading to shutdowns and job losses.

Increased competition has led employers to hire workers 'flexibly' on a temporary basis. This has resulted in job insecurity, low wages, long working hours, and a denial of benefits for many workers.

SEZs are industrial zones set up by governments to attract foreign investment. They offer world-class facilities, tax exemptions for an initial period, and flexibility in labour laws.

Fair globalisation means creating opportunities for all and ensuring that the benefits of globalisation are shared more equitably among all people. It aims to protect the interests of both the rich and the poor.

The government can ensure fair globalisation by implementing labour laws, supporting small producers, using trade barriers when necessary, and negotiating for fairer rules at the WTO.