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Factors Enabling Globalisation – Long Answer Questions (CBSE Class 10 Economics)

Medium Level (Application & Explanation)

Q1. Explain how Information and Communication Technology (ICT) speeds up globalisation and gives new opportunities to businesses and workers.

Answer:

  • ICT includes tools like internet, email, mobile phones, cloud storage, and video conferencing that allow instant exchange of information across countries.
  • It enables real-time coordination of tasks such as design in one country, manufacturing in another, and sales in a third.
  • Online services like e-commerce, online banking, telemedicine, and digital education are possible because of fast data transfer.
  • Call centres and IT support in India handle global customers due to reliable broadband, VOIP, and secure networks.
  • Remote working lets companies hire talent from anywhere, reducing cost and increasing productivity.
  • ICT reduces communication delays and costs, making decision-making faster.
  • Examples: Zoom classes across continents, Amazon orders tracked globally, and banks sharing transaction records securely.
  • In short, ICT becomes the backbone of globalisation by connecting people, processes, and markets seamlessly.

Q2. Describe how modern transport systems make global trade faster, cheaper, and more reliable.

Answer:

  • Modern transport includes container ships, cargo flights, high-speed trains, and express highways that ensure fast movement of goods and people.
  • Containerisation allows safe, standardised movement of large quantities, reducing loading time and cost at ports.
  • Air cargo transports perishable goods like fruits, flowers, and vaccines quickly, preserving quality and safety.
  • Efficient logistics with tracking systems, cold chains, and warehouse networks help reduce wastage and delays.
  • Affordable flights boost tourism and business travel, connecting markets and ideas.
  • Examples: Japanese cars shipped in bulk, Indian mangoes airlifted to London, and tourists visiting the Taj Mahal through low-cost airlines.
  • Faster transport reduces delivery time, lowers inventory costs, and increases market reach.
  • Overall, transport innovations turn the world into a connected marketplace.

Q3. What is trade liberalisation? Explain its impact on the Indian market after 1991 with examples.

Answer:

  • Liberalisation means reducing government controls on trade and investment, making it easier to buy, sell, and invest across borders.
  • Before 1991, India had strict import rules, high tariffs, licensing, and limited foreign investment to protect local firms.
  • After 1991 reforms, India opened its economy to FDI, global brands, and competition, improving quality and variety for consumers.
  • Prices decreased and choices increased due to foreign and domestic firms competing in the same market.
  • Examples: Suzuki partnering in India transformed the car market; Pepsi and Coca-Cola re-entered India; global electronics became easily available.
  • Liberalisation attracted technology, capital, and expertise, boosting exports and jobs, especially in IT and services.
  • It also exposed Indian firms to global standards, pushing them to improve efficiency and innovation.
  • Hence, liberalisation turned India into a more dynamic, competitive, and globally connected economy.

Q4. How does reducing trade barriers such as tariffs and quotas encourage global trade? Use examples to support your answer.

Answer:

  • Trade barriers like tariffs (import taxes), quotas (quantity limits), and licenses make trade costly and complex.
  • Reducing tariffs lowers prices of imported goods, making them affordable for consumers and cost-effective for businesses.
  • Removing quotas helps firms export more to new markets, boosting production and employment.
  • WTO agreements encourage countries to reduce barriers and follow fair trading rules.
  • Examples: India reduced import duty on computers, making laptops cheaper; NAFTA enabled free trade between USA, Canada, and Mexico; Indian textiles expanded exports after quota removal.
  • Lower barriers also help small and medium exporters reach international customers more easily.
  • Consumers benefit from better quality and variety, while firms gain larger markets and economies of scale.
  • Overall, barrier reduction increases trade volume, efficiency, and global integration.

Q5. Explain how government policy decisions like SEZs, FDI, and visa reforms support global movement of goods, services, and people.

Answer:

  • Governments create business-friendly policies to attract global investment and talent.
  • Special Economic Zones (SEZs) offer tax breaks, simplified rules, and infrastructure, encouraging companies to set up factories and offices.
  • FDI policies allow foreign companies to invest directly, bringing capital, technology, and jobs. Example: 100% FDI in telecom helped build world-class networks.
  • Double Taxation Avoidance prevents the same income from being taxed twice, encouraging cross-border business.
  • Liberal visa rules and better air connectivity support movement of professionals, students, and tourists.
  • Examples: SEZs in Noida and Chennai host global IT and manufacturing firms; tourism increases with easier visas; global companies open stores and factories due to clear policies.
  • Together, these policies create a predictable, attractive, and connected environment for globalisation.

High Complexity (Analytical & Scenario-Based)

Q6. A smartphone you use is designed in the USA, made in China, uses software from India, and is sold in India. Analyse how ICT and modern transport make this global value chain possible.

Answer:

  • ICT enables real-time collaboration among designers, coders, suppliers, and marketing teams across time zones using cloud tools, version control, and video meetings.
  • Companies manage supply chains digitally—tracking parts, production schedules, and shipments through enterprise software and IoT devices.
  • Modern transport moves components to assembly plants via container ships and sends finished phones to markets using air cargo for speed.
  • Customs digitisation and e-invoicing reduce paperwork and delays at ports.
  • Liberalised trade and lower tariffs on components reduce input costs, while FDI allows global firms to partner with local distributors.
  • Service centres and customer support in India run on ICT, offering updates and troubleshooting instantly.
  • The mix of technology, transport efficiency, and trade-friendly policies keeps costs low, quality high, and delivery fast—making global value chains sustainable.

Q7. A local textile unit wants to export to Europe after trade liberalisation. Evaluate the opportunities and challenges it might face.

Answer:

  • Opportunities:
    • Lower tariffs and removed quotas make it easier to enter European markets.
    • Access to SEZ benefits, export incentives, and simplified customs can reduce costs.
    • E-commerce platforms and B2B portals help find international buyers.
    • Improved logistics and container shipping ensure timely deliveries.
  • Challenges:
    • Strict quality, safety, and labour standards in Europe require upgrades in processes.
    • Currency fluctuations can affect profit margins.
    • Global competition from low-cost producers like Bangladesh or Vietnam.
    • Need for certifications (e.g., sustainability, fair trade) and compliance documentation.
  • With ICT for marketing, modern transport, and policy support, the unit can succeed, but it must invest in quality, design, and compliance to stand out in a competitive global market.

Q8. An Indian mango exporter plans to sell in the UK. Using the factors of globalisation, outline the steps and supports that make this possible.

Answer:

  • Use ICT to connect with UK importers, manage orders, ensure cold-chain tracking, and handle digital payments.
  • Leverage air cargo with refrigerated storage to keep mangoes fresh; plan shipments during peak season for best prices.
  • Rely on reduced trade barriers and bilateral agreements to keep tariffs manageable and paperwork predictable.
  • Operate from an SEZ or use APEDA support for standards, packaging, and export documentation.
  • Ensure quality certifications, phytosanitary checks, and traceability as required by UK regulations.
  • Access export finance and insurance to manage risks like delays or spoilage.
  • Benefit from liberal visa and travel policies for business visits and trade fairs to build long-term buyer relationships.
  • Together, technology, transport, barrier reduction, and policy support enable reliable, profitable exports of perishables.

Q9. Suppose the government raises import duties on electronics to protect domestic industry. Analyse likely effects on consumers, firms, and ICT-enabled services.

Answer:

  • Consumers:
    • Higher prices for imported phones and laptops; reduced variety and features in the short term.
    • Possible delay in access to latest technology.
  • Domestic firms:
    • Short-term protection may help local manufacturers grow capacity.
    • Need to invest in R&D and quality to remain competitive when tariffs fall later.
  • ICT-enabled services:
    • Higher hardware costs may increase expenses for IT firms, startups, and education.
    • Could push a shift toward local assembly and component ecosystems.
  • Trade:
    • May trigger retaliation or reduce FDI interest if uncertainty rises.
  • Overall:
    • Protection can be a temporary boost but must be paired with policy support, skills, and infrastructure to avoid long-term loss of co...

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