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Globalisation is the process of rapid integration of countries through greater foreign trade, foreign investment, and movement of technology and people across borders. Main factors: (1) Technology — internet, telecommunications, containerised shipping, air transport made global trade fast and cheap. (2) Liberalisation — removal of trade barriers (reduced tariffs, quotas). (3) MNCs — set up production across countries, linking markets. (4) WTO — establishes rules for international trade. (5) Foreign Direct Investment (FDI) — companies invest in other countries. In India, economic reforms of 1991 (LPG — Liberalisation, Privatisation, Globalisation) opened the economy to global trade.

MNCs (Multinational Corporations) are companies that produce goods/services in more than one country. They operate by: (1) Setting up factories where labour is cheap (e.g., India, China). (2) Buying local companies in other countries. (3) Joint ventures with local companies. (4) Outsourcing production to smaller companies. Examples: Samsung, Apple, Toyota, Coca-Cola, Amazon. They choose locations based on cheap labour, proximity to markets, and favourable government policies.

Positive impacts: (1) Greater foreign investment — improved infrastructure. (2) More job opportunities — IT, BPO, manufacturing. (3) Better quality goods at lower prices due to competition. (4) Technology transfer from developed countries. (5) India became a global IT and services hub. Negative impacts: (1) Small producers and farmers hurt by cheap imports. (2) Workers in unorganised sector face job insecurity. (3) Growing inequality — benefits not equally distributed. (4) Environmental degradation. (5) Cultural homogenisation. Overall: Globalisation has benefited India but the benefits are unevenly distributed. Top and middle classes gained more; poor workers and small producers need more protection.

WTO (World Trade Organisation) was established in 1995 to liberalise international trade. It sets rules for trade between nations. Has 164 member countries. Aims to remove trade barriers. Criticised for favouring developed nations — forces developing countries to open markets but developed countries maintain their own protections (agricultural subsidies).

Trade barriers are restrictions imposed by government on foreign trade — tariffs (import taxes), quotas (quantity limits), licensing requirements. India had high trade barriers before 1991 to protect domestic industries. India removed them because: (1) 1991 economic crisis forced liberalisation (IMF conditions). (2) To attract foreign investment. (3) To make Indian industry competitive globally. (4) To get cheaper goods and technology.