Globalisation and the Indian Economy Class 10 Questions and Answers
Complete NCERT-based revision with very short, short and long answer questions covering globalisation, MNCs, foreign investment, foreign trade, technology, liberalisation, WTO, impact on India, small producers, employment and fair globalisation.
Very Short Answer Questions
Quick-recall questions for definitions, facts, concepts and one-line explanations.
1. What is globalisation?
AnswerGlobalisation is the process of rapid integration or interconnection between countries.
2. What is a multinational corporation (MNC)?
AnswerAn MNC is a company that owns or controls production in more than one nation.
3. What is foreign investment?
AnswerInvestment made by an MNC in another country is called foreign investment.
4. What is investment?
AnswerInvestment is money spent to buy assets such as land, buildings, machines and equipment with the expectation of earning profit.
5. What is foreign trade?
AnswerForeign trade is the exchange of goods and services between countries.
6. What is meant by integration of markets?
AnswerIt means that markets of different countries become connected through trade and competition.
7. Name one major factor that has enabled globalisation.
AnswerRapid improvement in technology.
8. What is liberalisation?
AnswerLiberalisation means removing or reducing government restrictions on foreign trade and investment.
9. What is a trade barrier?
AnswerA trade barrier is a government restriction used to regulate foreign trade.
10. Give one example of a trade barrier.
AnswerA tax on imports is an example of a trade barrier.
11. What is a quota?
AnswerA quota is a limit imposed by the government on the quantity of a good that can be imported.
12. What is WTO?
AnswerWTO stands for World Trade Organisation.
13. What is the main aim of the WTO?
AnswerIts stated aim is to liberalise international trade.
14. Which organisation establishes rules regarding international trade?
AnswerThe World Trade Organisation.
15. Why do MNCs set up production in different countries?
AnswerThey seek favourable locations with low production costs, suitable resources, labour and markets.
16. Why do MNCs prefer locations close to markets?
AnswerBeing close to markets can reduce costs and make it easier to serve customers.
17. How can MNCs support local companies?
AnswerThey may provide investment, new technology, orders or opportunities for collaboration.
18. Name one way in which MNCs control production.
AnswerThey may buy local companies.
19. How can MNCs use small producers?
AnswerThey can place orders with small producers and sell the finished products under their own brands.
20. What happens to consumer choice when foreign trade increases?
AnswerConsumer choice generally increases because goods from more countries become available.
21. How does foreign trade benefit producers?
AnswerIt gives producers access to markets beyond their own country.
22. How does foreign trade benefit buyers?
AnswerIt gives buyers a wider choice of goods.
23. What happened to the price of Chinese toys in the NCERT example?
AnswerChinese toys were available at cheaper prices in Indian markets.
24. Name one technology that has supported globalisation.
AnswerThe Internet.
25. How has transportation technology helped globalisation?
AnswerIt has made faster movement of goods over long distances possible at lower costs.
26. What is the role of IT in globalisation?
AnswerIT allows information and services to be communicated and delivered rapidly across countries.
27. Why are containers important in international trade?
AnswerThey reduce handling costs and increase the speed of transporting goods.
28. In which year did India begin major changes towards liberalisation?
Answer1991.
29. Why did India initially impose barriers on foreign trade?
AnswerTo protect newly developing domestic industries from foreign competition.
30. What happened to trade barriers after liberalisation?
AnswerThey were removed or reduced to a large extent.
31. Name one Indian company that became an MNC.
AnswerTata Motors.
32. Name one Indian IT company mentioned in the chapter.
AnswerInfosys.
33. What is an SEZ?
AnswerSEZ stands for Special Economic Zone, an industrial zone created to attract investment and promote production.
34. Why are governments interested in attracting foreign investment?
AnswerForeign investment can bring capital, technology, production and employment opportunities.
35. What does flexible employment mean in the chapter?
AnswerIt refers to hiring workers for shorter or temporary periods according to the employer's needs.
36. Who has benefited most from many new opportunities created by globalisation?
AnswerPeople with education, skills and wealth have generally been better placed to benefit.
37. Name one group that has faced difficulties due to rising global competition.
AnswerMany small producers and workers.
38. What is meant by fair globalisation?
AnswerFair globalisation means creating opportunities for all and ensuring that its benefits are shared more widely.
39. Why do workers in export industries sometimes face pressure?
AnswerEmployers face pressure to reduce costs and may therefore reduce labour costs and increase temporary employment.
40. What is one important demand of developing countries regarding global trade?
AnswerThey seek fairer trade rules and more balanced treatment in international trade.
Short Answer Questions
Use these for 2–3 mark preparation, explanation and comparison-based answer writing.
41. Explain why MNCs spread production across different countries.
AnswerMNCs spread production to locations where labour and other resources are available at lower cost, markets are accessible, skills are available and government policies are favourable. Dividing production across countries can reduce costs and increase profits.
42. Explain two ways in which MNCs interact with local companies.
AnswerMNCs may form partnerships with local companies and provide capital or technology. They may also place orders with local producers or purchase existing local companies.
43. How does an MNC benefit from locating production in a country with skilled labour?
AnswerSkilled workers can perform specialised tasks efficiently and help maintain quality. This can make production more competitive and reduce the cost of obtaining specialised services elsewhere.
44. Distinguish between foreign investment and foreign trade.
AnswerForeign investment involves investing money in assets or production facilities in another country. Foreign trade involves buying and selling goods or services across national borders.
45. How does foreign trade integrate markets?
AnswerForeign trade allows goods to move between countries. Consumers get more choices, producers face competition from abroad and prices of similar goods in different markets may move closer together.
46. Explain the importance of foreign trade for consumers.
AnswerForeign trade increases the range of goods available to consumers. It can also increase competition, which may lead to better quality and lower prices for some products.
47. Why did Chinese toys become popular in the Indian market in the NCERT example?
AnswerThey were cheaper and offered new designs. Indian consumers therefore had an incentive to choose them over many Indian toys.
48. How did Chinese toy imports affect Indian toy producers?
AnswerIndian toy producers faced stronger competition. Their sales declined, and some producers suffered losses.
49. Explain the connection between foreign trade and competition.
AnswerWhen goods enter another country's market, domestic producers have to compete with foreign producers. This can encourage improvements in price, quality, design and production methods.
50. How has transportation technology encouraged globalisation?
AnswerImproved transportation has reduced the time and cost required to move goods across long distances. This makes international production and trade easier.
51. How has the Internet helped globalisation?
AnswerThe Internet allows information, instructions, documents and communication to move almost instantly across countries. It has also helped services such as design, accounting and customer support to be provided internationally.
52. Explain how IT can spread production of services across countries.
AnswerDigital information can be sent rapidly between countries. Therefore, activities such as designing, data entry, accounting and customer support can be performed in one country for customers or companies located in another.
53. What is a trade barrier? Why is it called a barrier?
AnswerA trade barrier is a restriction placed by the government on foreign trade. It is called a barrier because it makes the movement of imported or exported goods more difficult or costly.
54. How does an import tax affect imported goods?
AnswerAn import tax raises the cost of imported goods. Higher prices can reduce demand for imports and make domestic products relatively more competitive.
55. How can quotas regulate imports?
AnswerA quota sets a maximum quantity of a particular good that may be imported. By limiting the quantity, the government can restrict foreign competition in the domestic market.
56. Why did India impose trade barriers after Independence?
AnswerIndian industries were developing during the 1950s and 1960s. The government feared that unrestricted imports would expose these new industries to strong foreign competition before they were capable of competing effectively.
57. Why did India reduce trade barriers from around 1991?
AnswerThe government wanted Indian producers to compete globally and improve quality and performance. Barriers to foreign trade and investment were therefore reduced to a large extent.
58. How does liberalisation promote globalisation?
AnswerLiberalisation reduces restrictions on imports, exports and foreign investment. This makes it easier for goods, companies and investment to cross national borders, increasing economic integration.
59. Why is technology considered an important factor behind globalisation?
AnswerTechnology has reduced the time and cost of transportation and communication. It has also made it possible to coordinate production and services across distant countries.
60. Explain the role of the WTO in global trade.
AnswerThe WTO aims to liberalise international trade and establishes rules relating to international trade. It also works to ensure that member countries follow agreed trade rules.
61. Why do developing countries sometimes criticise WTO trade practices?
AnswerDeveloping countries have argued that they are required to reduce trade barriers while some developed countries continue to protect their producers through subsidies or other barriers.
62. How does globalisation benefit consumers?
AnswerConsumers can receive greater choice, improved quality and lower prices for several products because domestic and foreign producers compete in the market.
63. Why has the impact of globalisation not been uniform?
AnswerDifferent people and producers have different levels of education, skills, capital and ability to compete. Therefore, some gain from new opportunities while others face stronger competition and insecurity.
64. How have some Indian companies benefited from globalisation?
AnswerSome Indian companies have adopted new technology, improved production methods, collaborated with foreign companies and expanded into international markets.
65. How has globalisation created opportunities for Indian IT services?
AnswerImproved communication technology allows services such as data entry, accounting, administrative work and engineering to be performed in India for clients in developed countries.
66. Why do governments establish SEZs?
AnswerSEZs are created to attract foreign investment and encourage production by providing better infrastructure and selected policy incentives.
67. What facilities are expected in SEZs?
AnswerSEZs are expected to provide facilities such as electricity, water, roads, transport, storage and other infrastructure required by industries.
68. How can flexible labour policies reduce company costs?
AnswerCompanies can hire workers for shorter periods according to demand. This can reduce the cost of maintaining a permanent workforce.
69. Why can flexible employment be difficult for workers?
AnswerTemporary workers may have less job security and may not receive the same benefits and protections as permanent workers.
70. Why are small producers vulnerable to global competition?
AnswerMany small producers have higher production costs, limited technology, weaker infrastructure and less access to finance and markets than large domestic or international firms.
71. How can better infrastructure help small producers?
AnswerBetter roads, power, water, raw-material supply and communication networks can reduce production and distribution difficulties and improve competitiveness.
72. Why is modern technology important for small producers?
AnswerModern technology can improve productivity, quality and efficiency, helping small producers compete with larger firms and imports.
73. Why is affordable credit important for small producers?
AnswerAffordable and timely credit allows producers to purchase machinery, raw materials and other inputs and invest in modernisation.
74. How can globalisation affect workers in export industries?
AnswerExport opportunities can create jobs, but intense competition may also encourage employers to reduce labour costs, use temporary workers and demand longer or more flexible working arrangements.
75. Why are educated and skilled people often better positioned to benefit from globalisation?
AnswerThey can take advantage of new technologies, international services and skilled employment opportunities more easily than people lacking the required skills or resources.
76. What should governments do to make globalisation fairer?
AnswerGovernments can protect workers' rights, support small producers, negotiate for fairer trade rules and ensure that the benefits of globalisation reach wider sections of society.
77. What role can people’s organisations play in fair globalisation?
AnswerPeople's organisations can campaign, represent affected groups and influence decisions relating to trade and investment.
78. Why is fair globalisation considered necessary?
AnswerBecause the benefits of globalisation are not automatically shared equally. Fair policies are needed so that different groups receive opportunities and protection from harmful effects.
79. How can Indian companies themselves become MNCs?
AnswerSuccessful Indian companies can expand production, investment and operations into other countries and thereby develop an international presence.
80. Give three major channels through which countries become economically connected.
AnswerCountries can be connected through foreign trade, foreign investment and the movement of technology and services. International communication and, to a lesser extent, movement of people also connect countries.
Long Answer Questions
Use these for structured 4–5 mark preparation and high-quality answer writing.
81. What is globalisation? Explain how foreign trade and foreign investment contribute to it.
Answer Globalisation is the process of rapid integration or interconnection between countries. Foreign trade connects markets because goods and services move between countries and producers compete beyond their domestic markets. Foreign investment connects production because MNCs establish or control production facilities in different countries. Together, increasing foreign trade and foreign investment make production and markets increasingly interconnected.
82. Explain the various ways in which MNCs set up, control or produce in other countries.
Answer MNCs may establish factories and offices in foreign countries, form partnerships with local companies, provide investment and technology, purchase existing local companies, and place production orders with small producers. They may also use local companies for supplies. Through these arrangements, production in different countries becomes interconnected and MNCs gain influence over production, prices, quality and delivery.
83. How does foreign trade lead to integration of markets across countries?
Answer Foreign trade allows goods to move from one country's market to another. Consumers in each country gain access to products produced elsewhere. Producers from different countries compete with one another. As markets become connected, consumers get greater choice and prices of similar goods in different markets may tend to become closer. Therefore, foreign trade connects and integrates markets across countries.
84. Explain the three major factors that have enabled globalisation.
Answer First, rapid technological improvements have reduced the time and cost of transportation and communication. Second, improvements in information and communication technology, including computers, telecommunications and the Internet, have made it possible to coordinate production and services across countries. Third, liberalisation has reduced government restrictions on foreign trade and investment, allowing goods, services and investment to move more freely across borders.
85. Why did the Indian government initially impose barriers on foreign trade and foreign investment? Why were they later reduced?
Answer After Independence, Indian industries were still developing. The government feared that unrestricted foreign competition would make it difficult for new domestic industries to develop. Therefore, barriers were used to protect domestic producers. From around 1991, the government changed its approach and reduced barriers so that Indian producers could compete internationally and improve their performance, quality and efficiency.
86. Explain how technology has transformed the process of globalisation.
Answer Improvements in transport have made the movement of goods faster and cheaper. Container transport has reduced handling costs and increased speed. Air transport has also become more accessible for large volumes of goods. At the same time, telecommunications, computers, satellites and the Internet have made instant communication and transfer of information possible. These developments allow production and services to be coordinated across distant countries.
87. Explain the positive effects of globalisation on consumers and producers in India.
Answer Consumers have gained greater choice and, for many products, improved quality and lower prices because of greater competition. Some Indian producers have benefited by adopting better technology, improving production methods and entering international markets. Foreign investment has also created opportunities in industries and services such as automobiles, electronics, banking and IT. Thus, globalisation has created important opportunities, although the benefits have not been equally distributed.
88. Explain why the impact of globalisation has not been uniform in India.
Answer The benefits of globalisation depend on the ability to compete and use new opportunities. Well-off consumers may benefit from wider choice and lower prices. Skilled and educated workers can access new employment opportunities. Large Indian companies can adopt new technology and enter global markets. In contrast, many small producers face competition from cheaper imports and MNC brands, while some workers face temporary employment and weaker job security. Therefore, the impact differs across groups.
89. How has globalisation created opportunities for Indian companies?
Answer Indian companies have faced greater competition but have also gained access to larger markets and new technology. Some companies have improved production standards, adopted modern methods and collaborated with foreign companies. Some successful Indian companies have expanded abroad and become MNCs themselves. IT-based Indian services have also benefited from international demand.
90. Explain how globalisation has affected small producers in India.
Answer Small producers often face strong competition from MNCs and imported goods. Producers with high costs or outdated technology may lose markets and reduce production. Some units may close, causing workers to lose employment. However, small producers can become more competitive if they receive better infrastructure, modern technology, reliable raw materials, effective marketing networks and timely credit at reasonable interest rates.
91. Explain how globalisation has affected employment conditions in some industries.
Answer Global competition encourages exporters and employers to keep costs low. In some industries, companies have responded by using temporary workers rather than permanent workers. Employees may have uncertain jobs, longer working hours and fewer benefits. At the same time, globalisation has also created new employment opportunities in sectors such as IT, services and export-oriented industries. Thus, employment effects can be both positive and negative.
92. Explain the role of WTO and the concerns raised by developing countries.
Answer The WTO aims to liberalise international trade and establishes rules for international trade. However, developing countries have raised concerns that the rules are not always implemented equally. They point out that while developing countries have reduced trade barriers, developed countries have sometimes continued to protect their producers, especially farmers. Developing countries therefore demand more balanced and fair rules.
93. What are Special Economic Zones? Why do governments encourage them?
Answer Special Economic Zones are industrial zones designed to attract investment and promote production. Governments may provide good infrastructure and selected incentives to companies operating in these zones. The purpose is to attract foreign companies, increase investment, promote production and create employment. However, the wider effects on workers and affected communities also need to be considered.
94. How can the government make globalisation more fair?
Answer The government can enforce labour laws and protect workers' rights. It can support small producers through infrastructure, technology, marketing and affordable credit. It can negotiate for fairer international trade rules and protect national interests where necessary. It can also ensure that economic policies consider the interests of poorer and less powerful sections rather than only large companies and wealthy consumers.
95. “Globalisation has both advantages and disadvantages.” Explain.
Answer Globalisation can increase consumer choice, improve quality, encourage competition, attract investment, create jobs and open international markets for Indian companies. However, it can also expose small producers to strong competition and create insecure employment for some workers. The gains are therefore uneven. The challenge is to ensure that the opportunities created by globalisation are shared more fairly.
96. Explain the relationship between MNCs, foreign investment and globalisation.
Answer MNCs are major drivers of globalisation because they organise production across countries. They invest in factories, offices and other assets outside their home countries, creating foreign investment. Their production networks connect suppliers, workers, markets and technologies in different countries. As MNC investment and international trade expand, production and markets become increasingly integrated.
97. How can Indian small producers be helped to compete in a globalised economy?
Answer Small producers need reliable infrastructure such as roads and electricity, timely supplies of raw materials, modern technology, effective marketing and information networks. They also need credit at reasonable interest rates. Government support, training, technology upgrading and appropriate trade policies can help them improve productivity and compete more effectively.
98. Why should developing countries demand fairer rules in international trade?
Answer Developing countries often have less economic power than developed countries. If they remove trade barriers while developed countries continue protecting their own producers, competition may become unequal. Fairer rules would help create a more balanced trading system in which developing countries can compete on more equal terms.
99. “The benefits of globalisation should be shared better.” Explain.
Answer Globalisation creates opportunities, but people with education, skills and wealth often have greater capacity to use them. Small producers and less-secure workers may not receive the same benefits. Therefore, governments, companies and international institutions need policies that protect workers, support small producers and widen access to opportunities. This would make globalisation more inclusive.
100. Suppose two students disagree: one says globalisation has harmed India, while the other says it has helped India. How would you respond?
Answer Both arguments contain part of the truth. Globalisation has benefited many consumers, skilled workers and successful companies through greater choice, investment, technology and international markets. At the same time, many small producers and workers have faced intense competition and employment insecurity. Therefore, globalisation should not be judged as entirely good or bad. The key issue is how to make its benefits broader and its costs more fairly distributed.
Extended & Competency-Based Practice
These questions broaden coverage of the complete NCERT chapter and are especially useful for school assessments, projects and higher-order practice.
101. A company designs a product in one country, manufactures components in another, assembles it in a third and provides customer support from India. What concept does this illustrate?
AnswerThis illustrates the international division and interlinking of production, a major feature of globalisation in which different stages of production are organised across countries.
102. Why might an MNC choose one country for manufacturing and another for customer support?
AnswerDifferent countries may offer different advantages. One may provide low-cost manufacturing, while another may have skilled English-speaking workers and suitable communication infrastructure for customer support.
103. If an imported product becomes cheaper after a trade barrier is removed, who may benefit and who may face difficulties?
AnswerConsumers may benefit from lower prices and greater choice. Domestic producers making competing products may face stronger competition and may lose market share.
104. A small manufacturer loses customers after cheaper imported goods enter the market. Suggest three measures that could improve the manufacturer's competitiveness.
AnswerBetter technology, improved infrastructure and timely credit at reasonable interest rates can improve competitiveness. Better marketing and information networks can also help.
105. Why can the same globalisation process benefit one group while harming another?
AnswerDifferent groups possess different resources and abilities. A skilled company may use new markets and technology successfully, while a small producer with high costs may struggle against imports and MNC competition.
106. How does an improvement in communication technology affect international production?
AnswerIt allows companies in different countries to exchange information, instructions, designs and data rapidly. This makes it easier to coordinate production and services across borders.
107. Why can lower transport costs encourage international trade?
AnswerWhen transportation becomes cheaper, the cost of moving goods between countries falls. This can make international buying and selling more economically attractive.
108. Why is fair globalisation not simply the same as stopping globalisation?
AnswerFair globalisation seeks to retain the opportunities created by international integration while ensuring that workers, small producers and less powerful groups are not excluded from its benefits.
109. How can competition improve the performance of domestic producers?
AnswerCompetition can encourage producers to improve quality, reduce costs, adopt better technology and introduce improved products in order to retain customers.
110. Why is it important to study both the opportunities and challenges created by globalisation?
AnswerGlobalisation affects consumers, producers, workers and governments differently. Studying both sides helps students understand why globalisation can create economic opportunities while also producing unequal outcomes and challenges.
Quick Revision: Globalisation in One View
Complete Globalisation and the Indian Economy Revision
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