NCERT Class 10 Economics Chapter 4: Globalisation and the Indian Economy: NCERT Solutions, PDF (Free)

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NCERT Class 10 Economics Chapter 4: Globalisation and Indian Economy

Economics is one of the most interesting branches of social science. Class 10 Economics syllabus covers multiple dimensions of the Indian Economy. It includes major economic changes from post-independence to the present time. Chapter 4 Globalisation and the Indian Economy will take you through various aspects of Globalisation and its aftereffects. This chapter primarily highlights the role of multinational companies in bringing about Globalisation to India and worldwide. Let’s go through all the important points of this chapter!

An Introduction to NCERT Class 10 Economics Chapter 4: Globalisation and the Indian Economy

The chapter opens up by defining globalisation as the interconnectedness between countries resulting from foreign trade and investment. Multinational Companies (MNCs) are a key vehicle for dispersing the ideas of Globalisation worldwide. Some of the important ideas pertinent to Globalisation as per the chapter are:

  • Integration of production and markets
  • Transformation of markets
  • Technological advancement 
  • Opening up the economy 
  • Unequal impact on different countries and people

Also Read: 20+ Globalization Vocabulary For IELTS

Credits: Magnet Brains

Also Read: Comparative Development Experiences of India and its Neighbours

Globalisation and the Indian Economy: Production Across Countries 

Even before the start of Globalisation, there existed a thriving international trade between kingdoms and countries. However, this foreign trade was restricted to the exchange of raw materials. 

With the onset of Globalisation began the era of MNCs. MNCs can be defined as companies which have their working offices in more than one country. Its production takes place in multiple locations across the globe. The primary purpose of manufacturing and selling at different locations is to minimize the cost of production and, consequently, maximize profits. One of the pivotal characteristics of an MNC is its ability to produce goods in a global setup. 

The production carried out by the MNCs is bifurcated into various phases. These phases are then distributed to multiple companies. Therefore, the production of one good takes place in several locations. 

This impact of globalisation in India is visible in the growing numbers of MNCs. Due to the ample availability of skilled workforce and cheap labour, global companies find India a good business location as stated in the chapter on Globalisation and the Indian Economy. 

Dynamics Between MNCs and Local Producers

When an MNC comes to a country, it spends money on buying the factors of production. This money comes from a foreign company to domestic land is known as foreign investment. This capital aids the government’s financial resources, thereby enhancing overall economic growth. At the same time, the MNC can make better profits. An MNC will inevitably interact with the country’s local producers. This process of interaction takes place in the following manner:

  • A common approach for MNCs is to buy a local company. With this purchase, they can expand their production in the country.
  • Another approach is to make direct purchases from local manufacturers. An MNC places its order with a producer from another country at the desired rates. The locals act as suppliers. 
  • Creating business partnerships with local producers is another viable way for MNCs. 

Globalisation and the Indian Economy Class 10 NCERT PDF

Globalisation and the Indian Economy: Market Integration Through Global Trade

As we move further with the discussion of the chapter on Globalisation and the iNdian Economy, the next topic is the foriegn trade. Foreign Trade is one of the key instruments for connecting multiple countries. On the one hand, it enables domestic producers to expand into the international market. Also, it gives consumers a greater variety of choices. 

More importantly, foreign trade facilitates the movement of goods and services from one country to another. In doing so, it accelerates Globalisation. Globalisation and the Indian economy exemplify the crucial role of seamless foreign trade in integrated markets worldwide. Indian goods are available in many countries while the Indian markets sell goods coming from various countries abroad. 

Since you are learning about Globalisation, know all about the International Economics

Globalisation and the Indian Economy

The expansion of MNCs, coupled with advancements in foreign trade, has promoted the process of Globalisation. There is a large-scale movement of goods, services, investments, and technology across the globe. Some factors that have facilitated Globalisation are:


Technological advancement in transportation has significantly enhanced international trade. Besides, rapid development in communication, technology has made it easy to connect with anyone in the world. Satellite communication devices also facilitate access to information. 


Barriers to foreign trade, like high taxes on imports, hamper the movement of goods. Liberalization is the removal of these barriers. It facilitates Globalisation as well. Indian Globalisation resulted from its policy of liberalization in 1991.

As India is a developing nation, you must also check out Development Economics

Impact of Globalisation on Indian Economy | Class 10

As described in the chapter on Globalisation and the Indian Economy, the phenomenon of Globalisation has a varied impact on different countries and people. Let us have a look at some of the impacts on our country as mentioned in the chapter-

  • For Consumers: As a result of Globalisation, consumers enjoy a greater variety of choices for goods and services. They can access both imported products and domestic goods. Therefore, there is scope to upgrade their lifestyle.
  • For Producers: Indian Globalisation is both a boon and bane for the producers. The more well-off manufacturers can benefit immensely from their relationships with foreign counterparts. Small businesses, however, suffer from excessive competition. Overall, companies create employment and boost economic growth.
  • For Workers: Both industrial and agricultural workers face adverse consequences. Farmers and sellers face excessive competition in the agriculture sector. Alternatively, industrial workers face similar mistreatment.

As we reside in a welfare nation, we must learn the Basics of Welfare Economics

Impact of Globalisation on Indian Economy PPT

Also Read: How to Study in Class 10

Questioning Globalisation and Its Impact

Globalisation creates wide-ranging disparities in the domestic and international community. It reaps enormous benefits for the rich while affecting the poor unfavourably. Taking this in view, there is a popular demand for fair Globalisation. Some suggestions to address this challenge are-

  • Trade policies must focus on protecting the interests of all domestic producers.
  • Workers, both industrial and agricultural, should not face the brunt of blinded progress.
  • Governments should negotiate with the WTO for fairer rules of trade.

Also Read: Money and Credit Class 10 Notes

Globalisation and the Indian Economy PPT

Important Questions and Answers in NCERT Class 10 Economics Chapter 4

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

Ans: The process of integrating a nation’s economy with the economies of other nations while allowing for unrestricted commerce, financial flows, and cross-border migration is referred to as “globalisation”. It entails an expansion of global trade, the import and export of manufactured goods and related methods, financial and capital transfers occurring between nations, and migration of people between nations.

Ques 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?

Ans: The primary goal of the Indian government’s restrictions on international investment and trade was to shield domestic manufacturers and small industrialists from foreign rivalry. Eventually, the government came to understand that reducing these barriers would boost trade and the calibre of goods produced in the nation since foreign competition would motivate Indian industrialists to improve the quality of their goods.

Ques 3: How would flexibility in labour laws help companies?

Ans: To safeguard domestic producers and small business owners from foreign competition, the Indian government established restrictions to overseas commerce and foreign investment.

But later, it was acknowledged by the government that reducing these obstacles would boost commerce and improve the quality of goods produced in the nation since foreign competition would incentivize Indian industrialists to raise the calibre of their output.

Ques 4: What are the various ways in which MNCs set up or control production in other countries?

Ans: MNCs invest a sizable sum of money in the economy of a nation to set up and control output. In order to obtain a lower workforce, it places production facilities close to the marketplace. MNCs work with a few local businesses to boost production since the rate of production would rise quickly. The MNCs typically acquire local businesses and increase their output. They also have control over production by giving production orders to small, regional producers. They aid in manufacturing by utilising machinery and technology, which increases the effectiveness and productivity of the operation.

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

Ans: In order for their multinational corporations (MNCs) to establish factories in less-expensive developing nations and increase profits with lower production costs and the same selling price, developed countries want developing countries to liberalise trade and investment.

In exchange, emerging nations should, in my opinion, seek some type of protection for domestic producers against import competition. Multinational firms attempting to create a footprint in underdeveloped nations should likewise face charges.

Ques 6: “The impact of globalization has not been uniform.” Explain this statement.

Ans: “The impact of globalization has not been uniform.” The unskilled have not benefited from it; only trained and professional city dwellers have. Agriculture has benefited much less from globalisation than the industrial and service sectors. At the expense of domestic producers and the industrial working class, it benefited international businesses. Small producers of goods like batteries, capacitors, plastics, toys, tyres, dairy products, and vegetable oil have been impacted by competition from cheaper imports.

Ques 7: How has the liberalisation of trade and investment policies helped the globalisation process?

Ans: The removal of trade obstacles thanks to the liberalisation of trade and investment policy has aided globalisation. It has facilitated international trade and investment. The options available to consumers have increased as well, since they may now choose products made not just by domestic but also by international businesses. The price of goods has decreased as a result of trader competition. Globalisation has grown as a result of liberalisation because businessmen now decide what to export and import.

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

Ans: Foreign trade facilitates the convergence of markets across nations by providing producers with the opportunity to expand beyond their domestic borders. Also, They can now sell their goods not only in their own country but also in various countries worldwide. In turn, this encourages competition among producers, ultimately bringing them closer together. 

Additionally, consumers benefit from a wider array of choices from different parts of the world. As a result, foreign trade leads to a harmonization of prices for similar goods in different markets, and producers from different countries find themselves in close competition, even if they are geographically distant. Joint ventures, such as AIG’s involvement in the insurance sector in India, further exemplify how foreign trade leads to market integration.

Ques 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.

Ans: If the current trend persists, globalization is expected to advance further in the coming two decades. The world will witness even greater global interconnectivity and integration into a unified international economy, provided this progression remains fair and just. Trade, capital movement, and labour mobility will experience heightened levels. This is anticipated due to the reinforcement of liberalization policies and the convergence of multinational corporations with other entities producing similar goods.

Ques 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?

Ans: The advantages of globalization encompass enhanced trade prospects and a rise in employment, particularly in large-scale industries. The market for profits has expanded, contributing to heightened imports and exports within the national economy. This allows consumers to access products from around the globe at more affordable prices.

On the flip side, drawbacks of globalization involve an uneven surge in wealth for the affluent and a corresponding decline in income for the less privileged. This is due to the challenges faced by small-scale local industries in generating substantial profits, consequently exacerbating income disparities.

Ques 11. Fill up the blanks:

Indian buyers have a greater choice of goods than they did two decades back. This is closely associated with the process of __(1)____________. Markets in India are selling goods produced in many other countries. This means there is increasing __(2)____________ 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 _(3)____________ ___________________________________________. While consumers have more choices in the market, the effect of rising _(4)______________ and __(5)____________has meant greater _(6)________________among the producers.


  1. Globalisation 
  2. Trade 
  3. Of the cheaper production costs
  4. Demand
  5. Purchasing power
  6. Competition 

Ques 12: Match the following:

(i) MNCs buy at cheap rates from smallAutomobile producers
(ii) Quotas and taxes on imports are used to regulate trade itemsGarments, footwear, sports
(iii) Indian companies who have invested abroad      (c) Call centres
(iv) IT has helped in spreading of production of services      (d) Tata Motors, Infosys, Ranbaxy    
(v) Several MNCs have invested in setting up factories in India for production      (e) Trade barriers



Ques 13: Choose the most appropriate option

  1. The past two decades of globalisation have 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.

            2. 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

      3. Globalisation has led to improvements in living conditions
                a. Of all the people
                b. Of people in developed countries
                c. of workers in the developing nations
                d. None of the above


  1. c. goods, services and investments between countries
  2. c. buy existing local companies
  3. d. None of the above

Globalisation and the Indian Economy: Sample Questions 

Now, that you are through with the chapter, here are some practice questions for you- 

  • What is your understanding of Globalisation? Explain its correlation with progress.
  • What is the role of an MNC in facilitating Globalisation?
  • Is the impact of Globalisation uniform across the world and nations? Give reasons for your answer.
  • Explain how trade liberalization aids in expanding the scope of Globalisation for a country.
  • What is the role of foreign trade in creating a globalized world? Explain with examples. 
  • Are MNCs beneficial for a domestic economy? Substantiate your answer with examples.
  • Why is fair Globalisation a challenge for the global economic setup? What can nations do to resolve this issue?

Globalisation and the Indian Economy Class 10 MCQ

1. Removing barriers or restrictions set by the government is called:

(a) Liberalisation
(b) Investment
(c) Fovourable trade
(d) Free trade

 2. Rapid integration or interconnection between countries is known as:

(a) Privatisation
(b) Globalisation
(c) Liberalisation
(d) Socialisation

 3. Globalisation 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.

 4. Which one of the following Indian industries has been hit hard by globalisation?

(a) Information Technology (IT)
(b) Toy making
(c) Jute
(d) Cement

World Trade Organisation (WTO) was started at the initiative of which one of the following groups of countries?

(a) Rich countries
(b) Poor countries
(c) Developed countries
(d) Developing countries

Also, refer to the following blogs to explore career opportunities in the field of Economics:

Explore a Career in Social Economics
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How to Become an Economist: Career, Courses, Scope
BA Economics Jobs
Nature and Scope of Economics


How did globalisation affect Indian economy?

Globalisation has led to increased foreign investment, trade liberalisation, and the growth of the services sector, particularly in IT and outsourcing. This has helped boost economic growth, create jobs, and increase foreign exchange reserves. However, globalisation has also exposed vulnerabilities, such as dependence on global markets, fluctuations in commodity prices, and competition.

What is the globalisation of economy?

The globalisation of the economy refers to the interconnectedness and interdependence of countries’ economies through increased trade, investment, and cultural exchange, transcending national boundaries.

What are examples of globalisation?

Here are two examples of globalisation of the Indian economy:
1. Outsourcing: Indian companies providing services like IT, customer support, and back-office functions to global clients, showcasing the international integration of the economy.
2. Foreign Direct Investment (FDI): Multinational companies investing in Indian markets, leading to cross-border capital flows and technology transfer, exemplifying economic globalization.

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