The economic side of globalisation

Liberalisation: from 1991, India removed many rules that had protected its markets and industries from foreign competition: licences, import limits and high tariffs. This opened the economy to the world.

Part of the reason was a financial crisis. India took loans from the International Monetary Fund (IMF), and such loans come with conditions called structural adjustment: reforms to cut government deficits. These often meant cuts in spending on health, education and social security, which hurt the poor most.

Transnational corporations (TNCs): companies that produce goods or services in more than one country, such as Coca Cola and General Motors. Some Indian firms have also become transnational, with factories and offices abroad.

The electronic economy: money now moves across the world at the click of a mouse. Investors can move huge sums in and out of a country in minutes. This brings investment, but also risk: if they suddenly pull money out, a country's economy can crash.

The weightless (knowledge) economy: products based on information and ideas, not physical goods: software, media, entertainment, and services like event management. It has grown fast in India.

Globalisation of finance: with time zones overlapping, trading goes on 24 hours a day across the great financial centres: New York, Tokyo and London. Mumbai is India's financial capital.

Economics is the main driver of globalisation, but it is not the only side: politics and culture matter too (next lessons).