Q1. [3] deep thorough-understanding
⚠ Globalisation and the Indian Economy › IMPACT OF GLOBALISATION IN INDIA — Internal project only — not in the Board exam (per CBSE 2026-27 curriculum)
Only 'What is Globalisation?' and 'Factors that have enabled Globalisation' are in the Board exam; the remaining sub-topics are the internally-assessed interdisciplinary project. [source: Course Structure — Economics, Chapter 4 (Subtopics evaluated in Board)]MNCs have shown greater interest in industries such as cell phones, automobiles, electronics, and banking in urban India rather than in sectors like agriculture or small-scale manufacturing. What does this pattern reveal about the nature of MNC investment decisions?
Generated by claude-sonnet-4-6 · 2026-06-26 13:28 · grounding rag
Model Answer
MNC investment decisions are primarily profit-driven. MNCs invest in sectors where they can find large numbers of well-off buyers who can afford their products. Industries like cell phones, automobiles, electronics, and banking in urban India attract MNCs because urban consumers have higher purchasing power. Agriculture and small-scale manufacturing offer lower profit margins and fewer wealthy consumers. This reveals that MNCs are not guided by social needs but by market potential and profitability — they invest where costs are manageable and returns are high.
Source: Impact of Globalisation in India, Chapter 4
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Explanation
- The textbook directly states: "MNCs have been interested in industries such as cell phones, automobiles, electronics... in urban areas. These products have a large number of well-off buyers."
- The examiner wants you to link the pattern (urban, high-value sectors) to the reason (profit motive, purchasing power of consumers).
- Avoid writing about agriculture's problems broadly — stay focused on why MNCs avoid it (low profit, fewer rich buyers).
- Key phrase to include: profit motive and well-off buyers / purchasing power.