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1. Globalization and the Indian Economy and the Indian Economy

2. Globalization and the Indian Economy • • Globalization – rapid integration or interconnection between countries MNC’s – owns or controls production in more than one nation, MNC do the production in organized in increasingly complex way How MNC’s set up production across the countries – joint venture, placing order and buying company Foreign trade and integration of market Factor enabled globalization – technology (IT) in transport and communication Liberalization – removal of trade barrier and restriction set by government WTO – aim – liberalization and limitation Impact of globalization – merits and demerits Indian MNC’s – Tata Motors, Infosys, Ranbaxy, Asian paint, Sundaram fastener SEZ’s – Special Economic Zone Fair globalization • • • • • • • • •

4. Car Companies

5. Food Companies

6. Bike Companies

7. Cool Drink Companies

9. Globalisation

10. Globalisationis this process of rapid integration or interconnection between countries.

11. Production across countries Multinational corporations is a company that owns or controls production in more than one nation. for example - Pepsi, Nike, Apple Microsoft, etc.

12. Production across countries

13. Production across countries MNC is not only selling its finished products globally, but more important, the goods and services are produced globally. As a result, production is organised in increasingly complex ways.

14. Specialized Countries to support MNCs China provides the advantage of being a cheap manufacturing location. Mexico and Eastern Europe are useful for their closeness to the markets in the US and Europe. India has highly skilled engineers who can understand the technical aspects of production.

15. Interlinking Production Across Countries The money that is spent to buy assets such as land, building, machines and other equipment is called investment. Investment made by MNCs is called foreign investment.

16. Interlinking Production Across Countries Foreign Trade - The trade or buying and selling activities among the different countries are called foreign trade. • Export - Selling of goods or service to any foreign country. • Import- Buying of goods or services from rest of the world.

17. MNCs set up production 1. Jointly with some of the local companies First, MNCs can provide money for additional investments, like buying new machines for faster production. Second, MNCs might bring with them the latest technology for production. Cargill Foods, a very large American MNC, has bought over smaller Indian companies such as Parakh Foods.

18. Example of jointly

19. MNCs set up production 2. Large MNCs in developed countries place orders for production with small producers. Garments, footwear, sports items are examples of industries where production is carried out by a large number of small producers around the world.

20. Examples of Placing Order

21. MNCs set up production 3. By setting up partnerships with local companies, by using the local companies for supplies, by closely competing with the local companies or buying them up.

22. BENEFIT BY SPREADING PRODUCTION ; •Quality and cheap Labour. •Low cost of production. •Wider market. •Better quality of material. •Final production near the market. •And many more…..

23. BENEFIT OF INTERLINKING PRODUCTION For MNCs- • Standard of the products produced strictly as per the demand of the customer. • As the goods are produced and sold in one country the cost of production is less and hence can sale at a lower price. • Better consumer response as the goods is produced in their locality.

24. BENEFIT OF INTERLINKING PRODUCTION For domestic countries: •Increase employment opportunity for the people of domestic country. •It brings foreign capital and helps in expansion of foreign exchange (foreign currency) reserve. •Helps in utilisation of unused resources. •Customers get better quality products at a comparatively lower price. •Increase in countries revenue by way of tax.

25. Foreign trade and integration of market (a) Producer to reach beyond the domestic market (b) Expanding the choice of goods beyond (c) Prices of similar goods in the two markets tend to become equal (d) abroad product is available in the local market (e) Countries now closely Compete against each other and improve quality

26. FACTOR THAT HAVE ENABLED GLOBALIZATION STIMULATED Transportation Communication Information Technology Technology Banking & Insurance Trade Marketing

27. TECHNOLOGY

28. 1991 The government decided that the time had come for Indian producers to compete with producers around the globe. It felt that competition would improve the performance of producers within the country since they would have to improve their quality.

30. Liberalization - Removing barriers or restrictions set by the government is what is known as liberalisation. Trade Barrier - Governments can use trade barriers to increase or decrease (regulate) foreign trade and to decide what kinds of goods and how much of each, should come into the country.

31. (a) World trade Organisation. (b) Aim – to liberalize the international trade (c) Limitation - It is seen that the developed countries have unfairly retained trade barriers. On the other hand, WTO rules have forced the developing countries to remove trade barriers.

32. Impact of globalisation

33. Impact of globalisation Positive Impact: (a) able to create more job opportunity (b) quality of goods and services is increased (c) choice and varieties of goods and services is increased (d) we reach beyond the domestic market (e) abroad goods are available in the local market with reasonable prices.

34. Impact of globalisation Negative Impact: (a) Job opportunity are not increased as per the expectation (b) Poverty is not decline as per the expectation (c) Local and small producer find difficult to compete with MNCs (d) the gap between rich and poor is widening (e) domination of developed countries in the WTO

35. Special Economic Zone: (a) SEZs are to have world class facilities: electricity, water, roads, transport, storage, recreational and educational facilities. (b) Companies who set up production units in the SEZs do not have to pay taxes for an initial period of five years. (c) Government has also allowed flexibility in the labour laws to attract foreign investment.

36. Indian MNCs Globalisation has enabled some large Indian companies to emerge as multinationals Tata Motors (automobiles), Infosys (IT), Ranbaxy (medicines), Asian Paints (paints), Sundaram Fasteners (nuts and bolts) are some Indian companies which are spreading their operations worldwide.

37. IndianMNCs

38. Fair Globalization (a)The government can ensure that labour laws are properly implemented (b)Small producer to improve their performance till the time they become strong enough to compete (c) The government can use trade and investment barriers (d)provision to negotiate at the WTO for fairer rules. (e)To remove the domination of developed countries in the WTO

39. Thank you….