NCERT Solutions for Class 10 Economics Chapter 4 Globalisation and the Indian Economy

NCERT Solutions for Class 10 Social Science Economics Chapter 4 Globalisation and the Indian Economy help students to score good marks in the exams. These NCERT Solutions are prepared by expert teachers and based on the latest pattern and edition NCERT book. Here we have provided answers to all the questions in a very easy language.

Class 10 Economics Chapter 4 Globalisation and the Indian Economy Questions and Answers


Question 1. What do you understand by globalisation? Explain in your own words.

Answer: Globalisation is the increasing interconnectedness of countries worldwide, primarily through economic activities like international trade and investment by multinational corporations. It also involves cultural exchange, political cooperation, and social interactions. This process leads to a more integrated global community, where goods, services, ideas, and cultures move more freely across borders, shrinking distances and fostering global interdependence.

Question 2. What were the reasons for putting barriers to foreign trade and foreign investment by the Indian government? Why did it wish to remove these barriers?

Answer: The Indian government initially put barriers to foreign trade and investment after Independence to protect domestic producers from foreign competition. During the 1950s and 1960s, as Indian industries were in their initial stages, competition from imports would have risked their growth. Therefore, the government allowed only essential items like machinery, fertilisers, and petroleum to be imported. This protectionist approach was common in many developed countries during their early stages of development.

However, starting around 1991, India underwent significant policy changes. The government decided it was time for Indian producers to compete globally. This shift was driven by the belief that exposure to global competition would enhance the efficiency and competitiveness of Indian producers. Removing these barriers was a part of liberalizing the economy, integrating it more with the global market, and encouraging foreign trade and investment.

Question 3. How would flexibility in labour laws help companies?

Answer: Flexibility in labour laws helps companies by:

  1. Reducing labour costs, especially through short-term or contract hiring.
  2. Enhancing operational efficiency by allowing workforce adjustments based on business needs.
  3. Simplifying business processes, making it easier for companies to adapt or expand.
  4. Making the country more attractive for foreign investments due to ease of operation.

Question 4. What are the various ways in which MNCs set up, or control, production in other countries?

Answer: Multinational Corporations (MNCs) set up or control production in other countries in various ways:

  1. Location Near Markets: MNCs often establish production units close to their markets to reduce transportation costs and respond quickly to market demands.
  2. Access to Labor: They look for locations where they can access skilled and unskilled labour at low costs, which can significantly reduce overall production expenses.
  3. Availability of Factors of Production: MNCs ensure that other factors of production, like raw materials and technology, are readily available in the region.
  4. Supportive Government Policies: They often seek regions with government policies that are favourable to their business interests, such as tax breaks, incentives, and minimal regulatory hurdles.
  5. Investment in Assets: Once these conditions are met, MNCs invest in buying assets like land, buildings, and machinery to set up their factories and offices for production​

Question 5. Why do developed countries want developing countries to liberalise their trade and investment? What do you think should the developing countries demand in return?

Answer: Developed countries want developing countries to liberalize trade and investment to access new markets, acquire resources, find investment opportunities, and extend their economic influence. In return, developing countries should demand fair trade terms, access to advanced technology, investment in infrastructure and skill development, and ensure environmental protections. This mutual approach ensures both sides benefit and supports sustainable development in the developing nations.

Question 6. “The impact of globalisation has not been uniform.” Explain this statement.

Answer: Globalization’s impact is not uniform, with varying effects across different countries and within them. Economically, it tends to favour developed countries, often leaving developing nations with lesser benefits. In terms of employment, globalization can create new opportunities in some industries but lead to job losses in others, particularly in sectors that face stiff international competition. Culturally, the spread of global influences can sometimes overshadow local traditions and practices. Environmental consequences also vary, with some regions experiencing increased industrial activity and related environmental degradation. These diverse impacts show how globalization can lead to mixed outcomes, benefitting some while disadvantaging others.

Question 7. How has liberalisation of trade and investment policies helped the globalisation process?

Answer: Liberalization of trade and investment policies has significantly advanced the globalization process by removing barriers to trade and investment. This has led to increased cross-border trade, enabling goods and services to move more freely between countries. It has also encouraged multinational corporations to invest in different nations, promoting economic integration. As a result, economies have become more interconnected. However, while this has benefited skilled producers and affluent consumers, it has also increased competition, impacting small producers and workers. Thus, there’s a need for a fairer approach to globalization that ensures equitable opportunities and benefits for all sectors of society.

Question 8. How does foreign trade lead to the integration of markets across countries? Explain with an example other than those given here.

Answer: Foreign trade leads to the integration of markets across countries by allowing goods to travel from one market to another. This process increases the availability of products, equalizes prices, and intensifies competition among producers globally.

For example, consider the textile industry. If India starts importing textiles from Bangladesh where production costs are lower, Indian consumers get access to a wider variety of textiles at potentially lower prices. Meanwhile, Bangladeshi producers gain access to the vast Indian market, expanding their business opportunities. Conversely, Indian textile manufacturers might face increased competition, prompting them to improve quality or reduce prices. Thus, foreign trade connects and integrates the textile markets of both countries, leading to a more unified global marketplace.

Question 9. Globalisation will continue in the future. Can you imagine what the world would be like twenty years from now? Give reasons for your answer.

Answer: In twenty years, with ongoing globalization, we can expect:

  1. Greater economic interdependence between countries.
  2. Advanced technology further shrinking distances and enhancing global interactions.
  3. Increased cultural exchanges across nations.
  4. More international cooperation to address shared environmental challenges.
  5. Emerging economies gaining more global influence.
  6. New job opportunities in certain sectors, but potential job losses in others due to automation and outsourcing.
  7. Increased urbanization as people move to cities for economic opportunities.

Overall, the world will be more connected, with shared global challenges and opportunities shaped by technology and economic integration. However, addressing environmental impacts and social inequalities will be key.

Question 10. Supposing you find two people arguing: One is saying globalisation has hurt our country’s development. The other is telling, globalisation is helping India develop. How would you respond to these arguments?

Answer: In responding to these arguments, it’s important to acknowledge that globalization has both positive and negative impacts on India’s development:

The positive impacts of globalisation in India are as follows:

  • Globalization has opened up new markets for Indian products, boosting exports and economic growth.
  • It has facilitated the transfer of technology and knowledge, aiding India’s technological advancement.
  • Attracting foreign investments has led to the creation of jobs and improved infrastructure.
  • Globalization has expanded the range of products and services available to Indian consumers.

Negative Impact/Fears of Globalisation on Indian Economy:

  • Globalization can lead to job losses in industries that are unable to compete with cheaper foreign goods.
  • Globalization can widen the gap between the rich and the poor, leading to increased economic disparities.
  • Increased industrial activity due to globalization can lead to environmental degradation.
  • The influx of foreign cultural influences can overshadow local traditions and values.

In conclusion, while globalization has indeed helped India in terms of economic growth, technology, and consumer choice, it has also brought challenges like job losses in certain sectors and cultural impacts. Therefore, a balanced approach is needed to maximize the benefits of globalization while minimizing its negative effects.

Question 11. Fill in the blanks:

Answer: Indian buyers have a greater choice of goods than they did two decades back. This is closely associated with the process of globalisation. Markets in India are selling goods produced in many other countries. This means there is increasing trade with other countries. Moreover, the rising number of brands that we see in the markets might be produced by MNCs in India. MNCs are investing in India because of cheaper production costs. While consumers have more choices in the market, the effect of rising demand and purchasing power has meant greater competition among the producers.

Question 12. Match the following:

i. MNCs buy at cheap rates from small producersa. Automobiles
ii. Quotas and taxes on imports are used to regulate tradeb. Garments, footwear, sports items
iii. Indian companies who have invested abroadc. Call centres
iv. IT has helped in spreading of production of servicesd. Tata Motors, Infosys, Ranbaxy
v. Several MNCs have invested in setting up factories in India for productione. Trade barriers


i. MNCs buy at cheap rates from small producersb. Garments, footwear,      sports items
ii.  Quotas and taxes on imports are used to regulate tradee. Trade barriers
iii. Indian companies who have invested abroadd. Tata Motors, Infosys,      Ranbaxy
iv. IT has helped in spreading of production of servicesc. Call centres
v. Several MNCs have invested in setting up factories in        India for productiona. Automobiles

13. Choose the most appropriate option.   

(i) The past two decades of globalization has seen rapid movements in 
(a) goods, services and people between countries.
(b) goods, services and investments between countries. 
(c) goods, investments and people between countries.   

Answer: (b) goods, services and investments between countries. 

(ii) The most common route for investments by MNCs in countries around the world is to 
(a) set up new factories. 
(b) buy existing local companies. 
(c) form partnerships with local companies.  

Answer: (b) buy existing local companies. 

(iii) Globalization has led to improvement in living conditions 
(a) of all the people 
(b) of people in the developed countries |
(c) of workers in the developing countries 
(d) none of the above  

Answer: (d) none of the above  

More study materials for CBSE Class 10

NCERT Solutions for Class 10CBSE Notes for Class 10
CBSE Sample Papers for Class 10Important Questions for Class 10
RS Aggarwal Solutions For Class 10RD Sharma Solutions For Class 10

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