There has been a rapid transformation of the markets from what they were in yester years and their existence today. Earlier, the markets were loaded with domestically produced Indian products, but today, the Indian buyer has a wider choice than he had two decades ago. Indian markets today are flooded with products produced in other countries. This is the outcome of globalisation. Consumers have wider choices to make in the market and the producers are facing cut-throat competition to survive. This leads to improvement in the quality or standard of the products.

(i) Large MNCs in developed countries place order for production with small producers.
(ii) The MNCs sell these under their own brand names to the customers.
(iii) As they control the market with the huge demand, they are able to control prices.

(a) To producers:
(i) They have invested in newer technology and production methods and thereby raised their production standards.
(ii) They have gained from successful collaborations with foreign companies.
(iii) Globalization helped in the development of IT sector.
(iv) Good quality products are being produced at lower prices.
(b) To consumers:
(i) There is greater choice before consumers who can enjoy improved quality and lower prices for several products.
(ii) People today, enjoy much higher standards of living than was possible earlier.

(i) greater Competition among producers : Greater competition among producers both local and foreign, has been of advantage to consumers, particularly the well-off section of the society. Consumers of now have greater choice. For example: Shoes produced by Indian companies and shoes produced by MNCs like Bata, TSF, Woodland etc. Consumers have more choice. They can compare in terms of quality, price etc.
(ii) Phenomenal growth of service sector : The present share of service sector in country's GDP is more than 50%, which was about 40% in 1990 at the time of start of globalisation. Information and communication technology also grew on an average 20%.

Investment made by MNCs is known as foreign investment. In order to attract foreign investment following steps are taken by the Indian government:
(i) Restrictions on trade and barriers have been removed to a large extent.
(ii) India has allowed the Indian producers to compete with the producers of the world.
(iii) Allowing privatisation of many public sector industries by the government.
(iv) Flexibility in labour laws
(v) Liberalization of investment policies.

(i) Globalisation means unification or integration of the domestic economy with the world economy through trade, capital and technological flows.
(ii) factors that supported globalisation in India are as follows:
(a) Reduction of trade barriers with a view to allowing free flow of goods to and from other countries.
(b) Involvement of various local producers with MNCs in various ways.
(c) Some of the large Indian companies like Tata Motors, Infosys (IT), Ranbaxy, Asian Paints etc. emerged as MNCs and start working globally.

(a) It helps in sustaining a high level of investment.
(b) It fills up the technology and management gap.
(c) It ensures most efficient use of capital.
(d) It fills up the saving-investment gap.
(e) It minimises balance of payments problem.
(f) It undertakes the initial risk of investment.
(g) It helps in development of basic economic infrastructure.

(a) Companies have invested in advanced technology and production methods.
(b) Successful collaboration with foreign companies.
(c) Goods at cheaper rate and better quality..
(d) Better production process and management practices.
(e) Creation of new jobs in both domestic and international market.

Foreign trade. It is different because of opening of trade among different countries which had led to greater competition between different economies and the interdependency of economies of the world. It has also increased the air and sea transport. It has also increased the choice of goods in the market.

Today, the production is organised in an increasingly complex ways by a MNC. Lets take a example of a large MNC producing industrial equipment's.
(a) To begin with, it design its products in research centres in the United States.
(b) It, then, has the components of the equipment's manufactured in China.
(c) After the components are manufactured, they are shipped to Mexico and Eastern Europe.
(d) Then, the products are assembled in Mexico and Eastern Europe.
(e) The finished products are then sold all over the world.
(f) The company's customer care is carried out through the call centres located in India.
On the basis of the given example, we understand that the given MNC is not only selling its finished products globally but the goods and services are also being produced globally. The production process is divided into various parts and spread across the globe, like China providing the advantage of cheap manufacturing location. Mexico and Eastern Europe being useful for their proximity to the American and European markets. India in the basis of its highly skilled engineers providing technical nuances and its English speaking youth providing customer care services. All this division and specialisation leads to 50% to 60% cost savings for the given MNC. Undoubtedly, the organisation of today's complex production brings immense advantage to the given MNC.

The exchange of goods among people, states and countries is referred to as trade.
Importance of International Trade:
(i) International trade of a country is an index to its economic prosperity.
(ii) It is considered the economic barometer for a country. If the balance of international trade is favourable, a country will be able to earn more foreign exchange.
(iii) As no country is self-sufficient in all resources it cannot survive without international trade.
(iv) Countries have trade relations with the major trading blocks.
(v) Exchange of commodities and goods have been superseded by the exchange of information and knowledge.

The entry of MNCs in the market has led to the availability of greater choice of goods for the consumers.

People usually move from one country to another in search of better income, jobs and education.

The companies which set up their production units in the SEZs, do not have to pay taxes for an initial period of five years.

Till 2014, 160 countries were the members of the World Trade Organisation.

To reduce their cost of production and increases their profits.