CBSE Class 10 Social Science: Globalisation and the Indian Economy - NCERT Solutions

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CBSE Class 10 Social Science chapter on Globalisation and the Indian Economy explores how interconnectedness shapes our world. This chapter breaks down the concept of globalisation, explaining how it facilitates the movement of goods, services, and capital across national borders. It highlights the role of Multinational Corporations (MNCs) in this process, detailing how they invest in foreign countries to set up production units. The solutions clarify the benefits MNCs gain, such as accessing new markets and reducing production costs, often by leveraging local resources and labour. Understanding these dynamics is crucial for students to grasp the multifaceted impact of globalisation on India's economy, including its challenges and opportunities. This chapter serves as a foundational text for comprehending the forces driving international trade and investment in the contemporary world.

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BoardCBSE
ClassClass 10
SubjectSocial Science
Session2026
LanguageEnglish
TypeNCERT Solutions
ChapterChapter 4

Chapter summary

Chapter 4, 'Globalisation and the Indian Economy,' focuses on understanding the interconnectedness of economies worldwide. The NCERT Solutions explain the concept of globalisation through the lens of production chains, illustrating how different stages of manufacturing can occur in various countries. It defines foreign investment and provides examples, such as Ford Motors' operations in India. The solutions also explore the reasons why MNCs choose specific locations for their production facilities, highlighting the benefits of market proximity and cost-effectiveness. This chapter equips students with a foundational understanding of global economic activities and their effects on national economies.

Learning outcomes

  • Understand how production processes are spread across countries by multinational corporations.
  • Define foreign investment and identify its significance in global economic activities.
  • Explain the strategic reasons why multinational corporations establish production units in different countries.
  • Analyze the benefits of globalisation for both developed and developing economies.
  • Identify examples of multinational corporations and their operations in India.

Topics covered

Paper topics

  • Globalisation
  • Multinational Corporations (MNCs)
  • Foreign Investment
  • Production Processes
  • Globalisation and the Indian Economy
  • International Trade
  • Factors influencing MNC location
  • Market Access
  • Cost of Production

Important topics

  • Understanding Multinational Corporations (MNCs)
  • Definition and examples of Foreign Investment
  • The global spread of production processes
  • Advantages for MNCs in setting up plants abroad
  • Impact of Globalisation on the Indian Economy

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Questions and Solutions

Q.1

Complete the following statement to show how the production process in the garment industry is spread across countries: The brand tag says 'Made in Thailand' but they are not Thai products. We dissect the manufacturing process and look for the best solution at each step. We are doing it globally. In making garments, the company may, e.g., get cotton fibre from Korea,
Solution: The production process for garments is often spread globally to leverage different countries' strengths and reduce costs. For example, a company might source cotton fibre from Korea, procure buttons from France, develop the garment's design in Italy, manufacture the fabric in China, stitch the final garment in Thailand, and then distribute and sell the finished product worldwide. This global distribution of manufacturing steps allows companies to optimize each stage of production.

Q.1

Read the passage and answer the questions. Ford Motors, an American company, is one of the world's largest automobile manufacturers with production spread over 26 countries of the world. Ford Motors came to India in 1995 and spent Rs 1,700 crore to set up a large plant near Chennai. This was done in collaboration with Mahindra and Mahindra, a major Indian manufacturer of jeeps and trucks. By the year 2004, Ford Motors was selling 27,000 cars in the Indian markets, while, 24,000 cars were exported from India to South Africa, Mexico and Brazil. The company wants to develop Ford India as a component supplying base for its other plants across the globe. Would you say Ford Motors is a MNC? Why?
Solution: Yes, Ford Motors can certainly be considered a Multinational Corporation (MNC). This is because it is an American company that owns and controls production units in numerous countries (production spread over 26 countries). Its global presence, with manufacturing facilities and operations extending far beyond its home country, is a defining characteristic of an MNC. The company's head office is in the USA, but its extensive international operations confirm its MNC status.

Q.2

Read the passage and answer the questions. Ford Motors, an American company, is one of the world's largest automobile manufacturers with production spread over 26 countries of the world. Ford Motors came to India in 1995 and spent Rs 1,700 crore to set up a large plant near Chennai. This was done in collaboration with Mahindra and Mahindra, a major Indian manufacturer of jeeps and trucks. By the year 2004, Ford Motors was selling 27,000 cars in the Indian markets, while, 24,000 cars were exported from India to South Africa, Mexico and Brazil. The company wants to develop Ford India as a component supplying base for its other plants across the globe. What is foreign investment? How much did Ford Motors invest in India?
Solution: Foreign investment refers to the investment made by a company or individual from one country into assets in another country. Specifically, when a Multinational Corporation (MNC) invests in fixed assets like land, buildings, and machinery equipment in a host country to establish or expand its operations, it is termed as foreign investment. In the given case, Ford Motors invested Rs. 1,700 crore in India to set up its large manufacturing plant near Chennai.

Q.3

Read the passage and answer the questions. Ford Motors, an American company, is one of the world's largest automobile manufacturers with production spread over 26 countries of the world. Ford Motors came to India in 1995 and spent Rs 1,700 crore to set up a large plant near Chennai. This was done in collaboration with Mahindra and Mahindra, a major Indian manufacturer of jeeps and trucks. By the year 2004, Ford Motors was selling 27,000 cars in the Indian markets, while, 24,000 cars were exported from India to South Africa, Mexico and Brazil. The company wants to develop Ford India as a component supplying base for its other plants across the globe. By setting up their production plants in India, MNCs such as Ford Motors tap the advantage not only of the large markets that countries such as India provide, but also the lower costs of production. Explain the statement.
Solution: Multinational Corporations (MNCs) strategically choose locations for their production plants to maximize profits and minimize costs. By setting up facilities in countries like India, they gain access to a large domestic market, which means a significant number of potential customers for their products. Simultaneously, they can benefit from lower costs of production. This often includes cheaper labour, raw materials, and potentially more favourable government policies or infrastructure, all contributing to increased profitability and competitiveness in the global market.

Common mistakes

  • Confusing foreign investment with domestic investment.
  • Not clearly distinguishing between a multinational corporation and a domestic company.
  • Failing to connect the different stages of production in a globalised industry.
  • Overlooking the dual benefits MNCs seek: market access and cost reduction.

Revision tips

  • Focus on understanding the flow of goods and services in a globalised economy.
  • Use the Ford Motors example to illustrate the concepts of MNCs and foreign investment.
  • Draw diagrams to visualize the spread of production processes across countries.
  • Relate the concepts to real-world examples of global brands and their manufacturing locations.

Practice MCQs

Q1. What is a key characteristic of a Multinational Corporation (MNC)?

Q2. Which of the following is an example of foreign investment?

Q3. Why do MNCs often set up production plants in countries like India?

Q4. The statement 'Made in Thailand' on a garment tag, while the production process is spread globally, illustrates which concept?

Frequently asked questions

What is a Multinational Corporation (MNC)?

A Multinational Corporation (MNC) is a company that owns or controls production facilities in more than one country. It typically has its head office in one country and operates branches or factories in others, like Ford Motors.

What does 'foreign investment' mean in the context of MNCs?

Foreign investment is the capital invested by an MNC to purchase fixed assets, such as land, buildings, and machinery, in a host country to set up or expand its production operations.

How does the production process get spread across countries?

MNCs spread their production processes globally by sourcing raw materials from one country, designing in another, manufacturing components in a third, and assembling the final product in yet another, before selling it worldwide.

Why do MNCs like Ford Motors set up plants in India?

MNCs set up plants in countries like India to take advantage of large domestic markets and to benefit from lower costs of production, which helps in maximizing profits.

What is the significance of the 'Made in Thailand' example?

The 'Made in Thailand' example illustrates that a product's final assembly location doesn't mean all its components or manufacturing processes originated there. It highlights the global distribution of production stages by MNCs.

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