Globalisation and the Indian Economy Test - 30

It is an economic development effect suggested by Swedish economist Gunnar Myrdal.It basically means that if one particular area in a country starts growing or developing, it causes people, human capital as well as physical capital (infrastructure, finance, machines etc.) from other parts of the country to gravitate towards this growing centre.

The trade policy reforms aimed at  dismantling of  quantitative restrictions on imports and exports.

Export Processing Zones are industrial estates, which form enclaves from the domestic tariff areas (DTA). These are usually situated near airports or seaports. They are intended to provide an internationally competitive duty-free environment for export production at low cost. This enables the products of EPZs to be competitive, both quality-wise and price-wise in the international markets. 

Starting around 1991, some far-reaching changes in policy were made in India.  The government decided that the time had come for Indian producers to compete with producers around the globe. It felt that competition would improve the performance of producers within the country since they would have to improve their quality. This initiative was taken by the then Prime Minister of India, P.V. Narasimha Rao and Dr. Manmohan Singh.

The World Trade Organization (WTO)  is the only global international organization dealing with the rules of trade between nations. At its heart are the WTO agreements, negotiated and signed by the bulk of the world's trading nations and ratified in their parliaments.

An 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.

Many of the top MNCs have wealth exceeding the entire budgets of the developing country governments. MNCs might look for government policies that look after their interests. MNCs set up production where skilled and unskilled labour is available at low costs.

The U.S multinational Google opens it full fledged unit at Gurgaon, Haryana is the example of foreign
direct investment.

(i) Foreign trade creates an opportunity for the produces to reach beyond the domestic markets.

(ii) Producers can sell their produce not only in markets located within the country but can also compete in markets located in other countries of the world.

(iii) For the buyers, import of goods produced in another country is one way of expanding the choice of goods beyond what is domestically produced.

The era known as the 'Industrial Revolution' was a period in which fundamental changes occurred in agriculture, textile and metal manufacturing, transportation, economic policies and the social structure in England. This period is appropriately labeled "revolution", for it thoroughly destroyed the old manner of doing things; yet the term is simultaneously inappropriate, for it connotes abrupt change. The changes that occurred during this period (1760-1850), in fact, occurred gradually. The year 1760 is generally accepted as the "eve" of the Industrial Revolution. In reality, this eve began more than two centuries before this date. The last 18th century and the early 19th century brought to fruition the ideas and discoveries of those who long passed on, such as Galileo, Bacon, Descartes and others.

Due to new communication technologies, one of the biggest trends is to move call centres offshore to the global south to countries such as India where labour is cheap and the employees speak English. 80% of call centres in India cater to the international market. This industry in India is the result of globalisation since there were no domestic call centres in India prior to the international call centres. It is estimated that the Indian call centre industry now employs 1.2 million people for both inbound and outbound customer service.