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Factors Enabling Globalisation - CBSE Class 10 Economics

1. Technological Factors

a) Information and Communication Technology (ICT)

Key Points:

  • ICT refers to modern tools like computers, internet, email, mobile phones, tablets, and video conferencing.
  • These tools allow people and businesses to connect instantly, no matter where they are in the world.
  • ICT makes it possible to manage work, share data, and solve problems across different countries in seconds.

Elaboration:

  • ICT speeds up communication. A company can coordinate its production in India, sales in Germany, and design in the USA.
  • It enables online services and remote working. For example, Indian call centres handle customer queries for American or British companies.
  • Shared data can be sent and received immediately, supporting activities like online banking and e-commerce.

Examples:

  1. A bank in India sends transaction records to its US branch using secure internet platforms within seconds.
  2. Online teaching: An Indian teacher conducts a virtual class for Australian students using Zoom.
  3. Orders placed on Amazon in Europe are processed and managed by an IT team in India, thanks to online tracking and inventory systems.

b) Modern Transport

Key Points:

  • Modern transport includes cargo ships, airplanes, high-speed trains, and improved roads.
  • Advances in transport help goods and people move quickly and at a lower cost.

Elaboration:

  • Container ships carry thousands of containers full of cars, gadgets, or even food between continents.
  • Cargo flights deliver perishable goods like fruits or vaccines within days, keeping them fresh.
  • Fast flights and trains make international tourism and business meetings easier and more accessible.

Examples:

  1. Japanese cars are shipped to India and Europe on giant container ships.
  2. Fresh Indian mangoes are shipped to supermarkets in London by air cargo during the mango season.
  3. Tourists from all over the world visit the Taj Mahal because of affordable, fast international flights.

2. Liberalisation of Trade Policies

Key Points:

  • Liberalisation means removing or relaxing government rules and restrictions on international trade.
  • This encourages the free movement of goods, services, and investments.

Elaboration:

  • Before liberalisation, countries protected local businesses by making imports expensive or hard to get.
  • After liberalisation, foreign companies can invest easily, and people can buy goods from any country.
  • India's major liberalisation in 1991 allowed foreign brands and investment to flow in, changing the market forever.

Examples:

  1. Suzuki, the Japanese carmaker, entered India after liberalisation and became a leading player in the automotive market.
  2. Pepsi and Coca-Cola could enter India's market, selling globally popular drinks.
  3. China started opening its economy in the 1980s, which helped it become the “factory of the world.”

3. Reduction of Trade Barriers

Key Points:

  • Trade barriers include import duties (taxes), quotas (limits on quantity), and licensing rules.
  • Reducing these barriers makes it easier and cheaper to trade globally.

Elaboration:

  • Lower import duties mean you can buy imported products at lower prices.
  • Removing quotas lets businesses export more, supporting economic growth.
  • International agreements like those under the World Trade Organization (WTO) encourage countries to reduce trade barriers.

Examples:

  1. India slashed import duty on computers, making laptops cheaper and more available.
  2. Under NAFTA, Canada, USA, and Mexico traded goods freely, boosting economic activity in North America.
  3. Indian textile exporters expanded their sales to Europe and the USA once quotas were removed.

4. Policy Decisions Supporting Global Movement

Key Points:

  • Governments and world bodies create rules and incentives to boost global trade and business.
  • Friendly policies attract more investment, companies, and talent from different countries.

Elaboration:

  • Special Economic Zones (SEZs) are set up with facilities like tax breaks and easy regulations to attract foreign companies.
  • Policies like Double Taxation Avoidance and 100% Foreign Direct Investment (FDI) in certain sectors invite global businesses.
  • Liberal visa and air travel rules make it easier for talent and tourists to move internationally.

Examples:

  1. Noida and Chennai, with SEZs, house many foreign IT and manufacturing companies.
  2. India allowed 100% FDI in telecom, leading to world-class mobile networks with international players.
  3. Easy visa rules and promotion of tourism helped boost international tourist arrivals in India.

Recap and More Fun Examples

  • Technology allows instant connection and movement.
  • Trade liberalisation and reduced trade barriers make markets open and competitive.
  • Supportive government policies create a business-friendly environment.

Daily Life Examples:

  • Your smartphone is designed in the USA, manufactured in China, uses software from India, and reaches you in India by a ship or plane.
  • Indian students travel abroad for higher studies thanks to easy loans and relaxed visas.
  • A pizza in India may contain Italian cheese, American wheat, and local vegetables – a true global meal!

Scenario Based Questions and Answers

  1. Scenario: You are chatting with friends, and one wonders why they can buy an American phone at a local shop in India.

    • Question: What factors enable the phone to reach Indian markets?
    • Answer: Modern transport, reduced import duties, and trade liberalisation make it easy for companies to manufacture phones in one country and sell them in another. Supportive government policies allow these goods to be imported and sold smoothly.

  2. Scenario: Your uncle works in a call centre in Gurgaon, handling customers from the UK.

    • Question: How has globalisation enabled this job to exist?
    • Answer: Advances in ICT and liberalised economic policies make it possible for Indian companies to handle global customer support. Instant communication tools connect Indian employees with customers worldwide.

  3. Scenario: You notice new international food brands opening in your city.

    • Question: Why are so many foreign food brands coming to India now?
    • Answer: Liberalisation allows foreign companies to invest and open businesses in India. Reduction in trade barriers and friendly policies like FDI approvals encourage these brands to set up in the Indian market.

  4. Scenario: You read in the newspaper that Indian garments are being sold in the USA.

    • Question: What enables small Indian garment businesses to reach American stores?
    • Answer: Reduced trade barriers, like lower quotas and duties, help Indian manufacturers export goods more easily. Improved transport ships products worldwide, and government support through SEZs makes exporting attractive.

  5. Scenario: Your cousin studying in London attends a virtual seminar by an Indian professor without travelling.

    • Question: Which globalisation factors are at play here?
    • Answer: ICT tools such as the internet and video conferencing make it possible for learning and collaboration across borders. Supportive education policies and fast internet connections spread knowledge worldwide.

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