Q1. [3] medium thorough-understanding
MNCs like Hindustan Unilever, Nestlé, and Procter & Gamble sell their products in virtually every Indian town and village. (a) How do MNCs establish their presence in a host country — through which modes of investment or collaboration? (b) Explain how the widespread penetration of MNC products into everyday Indian consumer markets reflects the key features of globalisation.
Generated by claude-sonnet-4-6 · 2026-06-26 13:30 · grounding rag
Model Answer
(a) MNCs establish presence in host countries through:
- Foreign investment — setting up factories/offices by buying assets (land, machines, equipment).
- Joint production with local companies, bringing capital and latest technology.
- Buying up local companies (e.g., Cargill acquiring Parakh Foods).
- Placing orders with small local producers and selling products under their own brand.
(b) MNC products like soaps and toothpaste reaching every Indian town and village reflects globalisation's key feature: rapid integration of production and markets across countries. MNCs invest where labour and resources are cheap, then sell globally, leading to interconnection of distant regions. This increased foreign investment and trade integrates Indian markets with the global economy.
Source: Chapter 4 — Globalisation and the Indian Economy, "Interlinking Production Across Countries" and "What is Globalisation?"
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Explanation
- (a) lists all four modes mentioned in the textbook passage (direct investment, joint ventures, buyouts, subcontracting). Examiners expect at least 2–3 modes with brief examples.
- (b) must use the textbook definition of globalisation ("rapid integration/interconnection between countries") and link it to MNC investment + trade. Mentioning cheap labour, foreign investment, and market integration earns full credit.
- Stay within ~80 words total; prioritise textbook terminology over general knowledge.