Globalisation and the Indian Economy Test - 11

 A MNC is a company that owns or controls production in more than one nation. MNCs set up offices and factories for production in regions where they can get cheap labour and other resources. This is done so that the cost of production is low and the MNCs can earn greater profits.

If one wants to globalise, they have to allow liberalisation which involves removing protective trade barriers. One a country does that, you allow other countries to invest in your country which means foreign investment. Once a country invests in you a country can have better technology because it means one can export and import from any corner of the world. All this is nothing but globalisation.

The economic liberalisation in India refers to the ongoing economic liberalisation, initiated in 1991, of the country's economic policies, with the goal of making the economy more market-oriented and expanding the role of private and foreign investment. Specific changes include a reduction in import tariffs, deregulation of markets, reduction of taxes, and greater foreign investment. Liberalisation has been credited by its proponents for the high economic growth recorded by the country in the 1990s and 2000s. Dr Manmohan Singh is the pioneer of liberalisation of Indian economy.

Most regions of the world are getting increasingly interconnected. While this interconnectedness across countries has many dimensions — cultural, political, social and economic, it defines globalisation as the integration between countries through foreign trade and foreign investments by multinational corporations (MNCs). 

An export is a function of international trade whereby goods produced in one country are shipped to another country for future sale or trade. The sale of such goods adds to the producing nation's gross output. If used for trade, exports are exchanged for other products or services in other countries.

Most regions of the world are getting increasingly interconnected. While this interconnectedness across countries has many dimensions — cultural, political, social and economic, it defines globalisation as the integration between countries through foreign trade and foreign investments by multinational corporations (MNCs). 

About 1/3rd of the Indian textile industry’s total production is export-oriented and the biggest importer of Indian textile is the USA.

The WTO was founded in 1995 as the successor organisation to the General Agreement on Trade and Tariff (GATT). GATT was established in 1948 with 23 countries as the global trade organisation to administer all multilateral trade agreements by providing equal opportunities to all countries in the international market for trading purposes. 

In general, MNCs set up production where it is close to the markets; where there is skilled and unskilled labour available at low cost. In addition, MNCs might look for government policies that look after their interests. MNCs set up factories and offices for production. These are the features of an MNC.

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. Nearly 160 countries of the world are currently members of the WTO (as on June 2014).