Read the following passage and answer questions that follow.
Clamouring to enter India's red-hot retail sector, the world's largest chains, including Walmart stores, Carrefour and Tesco, are seeking the best way to enter the country, despite a government ban on foreign direct investment in the market. Recent large investments by major Indian businesses, like Reliance Industries and Bharti Airtel, have increased the sense of urgency for foreign retailers....Last week, Bharti Airtel indicated that it was in talks with Wal-Mart, Carrefour and Tesco to set up a retailing joint venture....India's retail sector is attractive not only because of its fast growth, but because family-run street corner stores have 97% of the nation's business. But this industry trait is precisely why the government makes it hard for foreigners to enter the market. Politicians frequently argue that global retailers would destroy thousands of small local players and fledging domestic chains.
Due to globalisation, MNCs are outsourcing work to developing countries because:
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → Labour is cheaper in developing countries which will yield bigger profits for the MNCs
Option (4) Labour is cheaper in developing countries which will yield bigger profits for the MNCs — Correct. More and more companies are reducing the number of permanent employees and outsourcing their work to smaller companies or even to homes. For multinational companies this outsourcing is done across the globe, with developing countries like India providing cheap labour. Lower wage costs mean higher profits for the multinational.
NCERT (2025-26): “Globalisation, Liberalisation and Changes in Indian Industry … More and more companies are reducing the number of permanent employees and outsourcing their work to smaller companies or even to homes. For multinational companies, this outsourcing is done across the globe, with developing countries like India providing cheap labour. Because small companies have to compete for orders from the big companies, they keep wages low, and working conditions are often poor.…” |