(i) "Indian economy has greatly benefitted by the process of globalisation." Justify the given statement with valid arguments. (ii) Distinguish between Multilateral Trade and Bilateral Trade. (i) Discuss briefly the foreign exchange reforms undertaken by the Government of India in the post 1991 period. (ii) Distinguish between Tariffs and Quotas.

Question

Accepted Answer

(i) **I justify the statement** that Indian economy has benefitted from globalisation. Valid arguments:

1. **Increased FDI:** Foreign direct investment increased from $100 million in 1990-91 to $30 billion in 2017-18
2. **Rise in Foreign Exchange Reserves:** Increased from $6 billion in 1990-91 to $646 billion in 2024
3. **Growth of Service Sector:** IT and BPO sectors grew significantly
4. **Technology Transfer:** Access to advanced technology from developed countries
5. **Export Growth:** Considerable increase in exports of auto parts, pharmaceuticals, engineering goods, IT software

(ii) **Difference between Multilateral and Bilateral Trade:**

| Basis | Multilateral Trade | Bilateral Trade |
|-------|-------------------|------------------|
| **Definition** | Exchange between more than two nations | Trade between two countries |
| **Scope** | Wider, involves multiple countries | Narrower, involves two countries |
| **Example** | WTO agreements | Trade agreement between India and USA |