AI-generated practice question — model-generated for extra practice, not a previous-year CBSE board question.
The small Indian supplier's production becomes interlinked with global production because the auto-components it manufactures are fed directly into the foreign MNC's production chain. The supplier is essentially one link in the MNC's global network — its output depends entirely on orders placed by the foreign company.
Risk created: The supplier becomes heavily dependent on the MNC for its business. If the MNC decides to shift its orders to a cheaper supplier elsewhere, or closes/relocates its India plant, the small supplier faces a sudden loss of orders and can suffer severe losses. This dependence leaves it vulnerable and with little bargaining power.
Source: Chapter 4 — Impact of Globalisation in India
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The examiner expects two clear parts: (1) explain how the linkage works — the supplier feeds into the MNC's production network, making it part of global production; (2) state the risk — over-dependence on a single large foreign buyer. The textbook notes that "local companies supplying raw materials etc. to these industries have prospered" but implies the flip side: their fortunes are tied to the MNC's decisions. Use terms like interlinked, global production network, and dependence/vulnerability for full marks.