NCERT Solutions for Class 10 Social Science History Chapter 4
Social Science Class 10 Economics
Globalisation and the Indian Economy 4
Important NCERT Questions Based on new NCERT Books for Session 2022-2023
Questions No: 7
How has liberalisation of trade and investment policies helped the globalisation process?
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Liberalisation of trade and investment policies has helped the globalisation process by easing the process of foreign trade and investment. Earlier, various developing countries had their own set of barriers and restrictions on imports and investments from abroad to protect the interest of domestic production. However later on, the barrier had to be removed to promote improvement in the quality of domestic goods. Import duties have been reduced, measures are being taken to ease the flow of foreign capital into the country, entry of MNC’s and Foreign direct investment and foreign funds encouraged to flow in.
Liberalization has given the power to make decisions of import and export in the hands of producers from all around the globe. This has led to a deeper integration of national economies into one conglomerate whole. It has also encouraged healthy competition among producers which has benefitted the consumer at large.
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Here are the key points about how the liberalization of trade and investment policies has aided the process of globalization:
– Increased International Trade: Reduction of trade barriers like tariffs and quotas has facilitated greater trade among nations, boosting economic interactions globally.
– Economic Growth: Liberalization encourages specialization, leading to increased productivity and economic growth as countries focus on producing goods/services they excel at.
– Job Creation: Expanded trade often leads to the growth of industries, creating more job opportunities as companies expand to meet demand.
– Enhanced Consumer Choices: Access to a wider variety of products and services from different countries provides consumers with more options, better quality, and competitive prices.
– Technological Advancement: Liberalization encourages the sharing of ideas and technology, fostering innovation and advancements that benefit multiple industries.
– Global Cooperation: It promotes collaboration among nations, encouraging discussions and joint efforts to address global challenges like environmental issues and security concerns.
– Challenges: Liberalization can lead to job displacement and increased inequality, impacting certain industries and local businesses that face tough competition from international companies.
These points highlight how liberalization has significantly shaped globalization, impacting economies and fostering interconnectedness among nations.
Liberalization of trade and investment policies has helped globalization in several ways:
1. Increased Trade: By reducing barriers like tariffs and quotas, countries can trade more freely, leading to a rise in the exchange of goods and services globally.
2. Foreign Investment: Easier investment rules attract more foreign companies, creating jobs and bringing in new technologies and expertise.
3. Competition and Efficiency: Companies strive to become better to compete globally, which results in better products, improved services, and competitive prices.
4. Economic Specialization: Countries focus on producing what they do best, leading to more efficient use of resources and better allocation of production.
5. Technology Sharing: Open policies encourage the exchange of technology and knowledge worldwide, resulting in global technological advancements.
6. Economic Growth: Liberalization often leads to economic growth, providing opportunities for countries to participate in global markets, attract investments, and develop their economies.
7. Market Expansion: Companies can access new markets and consumers worldwide, increasing their sales and market presence.
8. Potential Poverty Reduction: Economic growth from liberalization can create jobs, increase incomes, and improve living standards, potentially reducing poverty levels.
In essence, liberalization of trade and investment policies has facilitated the process of globalization by promoting global trade, enhancing competition, sharing technology, and fostering economic growth worldwide.