How has liberalization of trade and investment policies helped the globalization process?

Solution

Liberalization of trade and investment policies:

(i)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.

(ii)The products are supplied to the MNCs. But MNCs sell them under their own brand names to the customers. These large MNCs have tremendous power to determine price, quality, delivery and labour conditions for these distant producers.

(iii)MNCs investment is to buy up local companies and then to expand their production. MNCs with huge wealth, can quite easily do so. USA and other developed countries of the west are extending full support to them.

Some More Questions From Globalisation and The Indian Economy Chapter

How would flexibility in labour laws help companies?

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

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

‘The impact of globalisation has not been uniform’. Explain this statement.