7.1 The Concept of Globalisation — Janardhan's Story

Open the international page of any Indian newspaper printed in the last twenty years and the word globalisation appears in story after story — about call centres, free-trade agreements, foreign investment, K-pop concerts, Hollywood remakes, McDonald's outlets, and migrant nurses. To many, the word feels like a slogan. But behind the slogan lies a precise idea worth understanding. NCERT begins this chapter — the final chapter of Contemporary World Politics — with three small stories from ordinary Indian lives. Each illustrates a different face of the same phenomenon.

Each story is a fragment of globalisation. Janardhan's call-centre work is the globalisation of services. Ramdhari's birthday shopping is the movement of commodities from one part of the world to another. Sarika's job offer is part of the wider shift in values that globalisation brings — new opportunities, new conflicts, new identities.

But NCERT also gives the other side. A farmer commits suicide because expensive seeds supplied by a multinational company failed to germinate. An Indian company buys out a major rival in Europe over the protests of its current owners. Small retail shopkeepers fear that their livelihood will collapse if international retail chains arrive. A Mumbai film producer is accused of lifting the story of his film from a Hollywood movie. A militant group threatens college girls who wear "western" clothes. Globalisation, NCERT warns, is not always positive. It can have negative consequences. It is not only about economic issues. And the direction of influence is not always from the rich to the poor.

7.1.1 What, Then, Is Globalisation? — A Concept of Flows

Because the word is used so loosely, it is important to clarify what it actually means. As a concept, globalisation fundamentally deals with flows. These flows can be of many kinds — and the chapter lists four. Together, they create what NCERT calls "worldwide interconnectedness" — and that interconnectedness, sustained by these constant flows, is the heart of globalisation.

7.1.2 Globalisation Is Multi-Dimensional — Not Just Economics

It is wrong to assume that globalisation has purely economic dimensions, just as it would also be mistaken to assume that it is a purely cultural phenomenon. Globalisation is a multi-dimensional concept — political, economic and cultural — and these manifestations must be carefully distinguished. The impact of globalisation is also vastly uneven. It affects some societies more than others, and some parts of some societies more than others. We must avoid sweeping generalisations and pay attention to specific contexts.

Globalisation also involves what scholars call de-territorialisation^? — the loosening of the connection between social activity and a fixed geographical place. A call from a customer in Texas can be answered in Bengaluru; a film script for a Mumbai studio can be co-written in Los Angeles; a financial decision taken in New York can move stock prices in Mumbai within seconds. Linked to this is time–space compression^? — the world feels smaller and faster, because new technologies have shrunk the time it takes for ideas, capital, goods and people to travel across distance.

7.2 Causes of Globalisation

What accounts for globalisation? If globalisation is about the flows of ideas, capital, commodities, and people, it is logical to ask whether there is anything new about this phenomenon. After all, flows of all four kinds have taken place through much of human history.

7.2.1 Globalisation Has a Long History — But Today's Scale and Speed Are New

Long before steamships and the internet, ideas, goods and people moved across continents. The Silk Road connected China through Central Asia to West Asia and the Mediterranean for over a thousand years. The Indian Ocean trade network linked Indian ports to East Africa, Arabia, and Southeast Asia for centuries. European colonialism from the sixteenth century onwards created the first truly global economy — but at a brutal cost to the colonies. Those who argue that contemporary globalisation is genuinely new point not to the existence of these flows but to their scale and speed. A song uploaded to the internet today reaches every corner of the planet within hours. A currency crisis in Bangkok in 1997 shook stock markets in Mumbai and São Paulo within days.

7.2.2 Technology — The Critical Engine

While globalisation is not caused by any single factor, technology remains a critical element. There is no doubt that the invention of the telegraph, the telephone, and the microchip in more recent times has revolutionised communication between different parts of the world. When printing initially came into being it laid the basis for the creation of nationalism; today, similarly, we should expect that technology will affect the way we think of our personal but also our collective lives.

The ability of ideas, capital, commodities and people to move more easily from one part of the world to another has been made possible largely by technological advances. The pace of these flows may vary. The movement of capital and commodities is most likely to be quicker and wider than the movement of people across different parts of the world.

7.2.3 The End of the Cold War & the Neoliberal Turn (1991)

A second great cause of contemporary globalisation was the end of the Cold War in 1991 with the collapse of the Soviet Union. The disappearance of the socialist bloc removed the main alternative to free-market capitalism. Across the world, including in India, governments adopted neoliberal reforms — reducing the role of the state, opening up to foreign capital, privatising public-sector enterprises, deregulating finance. India's own famous 1991 LPG reforms — Liberalisation, Privatisation, Globalisation, under Finance Minister Manmohan Singh — were part of this global turn.

7.2.4 International Institutions & the Multinational Corporation

The post-1945 order had already created institutions that would, after 1991, accelerate globalisation. The International Monetary Fund (IMF), the World Bank and the General Agreement on Tariffs and Trade (GATT) — which became the World Trade Organization (WTO)^? in 1995 — set rules to lower trade barriers and move capital across borders.

Even more important, however, was the rise of the multinational corporation (MNC)^?. By 2023 there were roughly 80,000 MNCs operating worldwide, with around 840,000 affiliates spread across countries. Companies like Coca-Cola, Walmart, Toyota, Apple, Tata, Reliance, Samsung and Aramco produce, sell and source across continents. They organise global supply chains in which a single phone may be designed in California, programmed in Bengaluru, contain chips from Taiwan and Korea, and be assembled in Shenzhen for sale in Mumbai.

7.3 Political Consequences — Globalisation and the State

One of the most fiercely debated questions raised by contemporary globalisation is its political impact. How does globalisation affect traditional conceptions of state sovereignty^?? NCERT identifies three aspects we need to consider when answering this question. They do not pull in the same direction — globalisation pushes states in different ways at the same time.

7.3.1 First — Erosion of State Capacity (the Welfare State Shrinks)

At the most simple level, globalisation results in an erosion of state capacity — that is, the ability of governments to do what they used to do. All over the world, the old welfare state^? is now giving way to a more minimalist state that performs only certain core functions — maintenance of law and order, security of citizens, protection of borders. The state withdraws from many of its earlier welfare functions directed at economic and social well-being. In place of the welfare state, it is the market that becomes the prime determinant of economic and social priorities.

The entry and the increased role of multinational companies all over the world also reduces the capacity of governments to take decisions on their own. A state that wants to tax foreign investors heavily, or impose strict labour laws, may discover that the investors simply move elsewhere. The threat of capital flight disciplines policy. To stay attractive, governments compete in cutting taxes and regulations — what critics call a "race to the bottom".

7.3.2 Second — But the State Continues to Be Important

At the same time, globalisation does not always reduce state capacity. The primacy of the state continues to be the unchallenged basis of political community. The old jealousies and rivalries between countries have not ceased to matter in world politics. The state continues to discharge its essential functions — law and order, national security — and consciously withdraws from certain domains by choice. States continue to be important.

7.3.3 Third — In Some Ways, the State Becomes Stronger

Indeed, in some respects state capacity has actually received a boost as a consequence of globalisation. With enhanced technologies available — biometric IDs, surveillance cameras, mass digital databases, satellite imagery — the state is better able to collect information about its citizens. With this information, the state is better able to rule, not less able. Aadhaar, GST, digital tax records, CCTV networks, drone surveillance, big data analytics — all give the modern state powers no welfare state of the 1950s ever had. Thus, NCERT concludes, in some ways states become more powerful than they were earlier as an outcome of the new technology.

7.3.4 New Global Governance — Beyond the Nation-State

Globalisation has also produced new forms of global governance — institutions and rules that operate above the nation-state. The WTO sets rules for international trade that bind member states. The IMF imposes conditions on countries that borrow from it. Multilateral environmental treaties (UNFCCC, Paris Agreement) commit countries to emission targets. Regional bodies — EU, ASEAN, SAARC — pool some sovereignty for shared decision-making. The state is no longer the only player on the political field.