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Globalisation-Impact on India

Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Indian Economy and Indian Financial System — JAIIB.

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Q

What does globalisation broadly refer to in the context of economics?

A

Globalisation refers to the process of increasing integration and interdependence of economies across the world through the free flow of goods, services, capital, technology, and labour across national borders.

Q

What is the concept of 'brain drain' associated with globalisation in India?

A

Skilled professionals emigrating to developed countries for better opportunities.

Q

Which landmark year marked the beginning of India's economic liberalisation that opened it to globalisation?

A

1991 marked the beginning of India's economic liberalisation, when the government introduced the New Economic Policy (NEP) comprising liberalisation, privatisation, and globalisation (LPG reforms) in response to a balance of payments crisis.

Q

What is the TRIPS Agreement and how does it affect India under globalisation?

A

Trade-Related Intellectual Property Rights agreement affecting India's patent laws.

Q

What is the role of the World Trade Organisation (WTO) in globalisation?

A

The WTO serves as the principal international body governing global trade rules, facilitating negotiations, resolving trade disputes, and ensuring member countries adhere to agreed trade liberalisation commitments.

Q

What is the significance of India's trade openness ratio in measuring globalisation?

A

Trade as percentage of GDP indicating integration with global economy.

Q

How did globalisation affect India's Foreign Direct Investment (FDI) inflows?

A

Globalisation led to a substantial increase in FDI inflows into India as the government progressively relaxed FDI caps across sectors, liberalised approval procedures, and allowed automatic route investments, making India one of the top global FDI destinations.

Q

What is Purchasing Power Parity (PPP) and why is it important for comparing globalised economies?

A

Method adjusting exchange rates to compare real purchasing power across countries.

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