Q1. [2] straightforward initial-understanding
⚠ Globalisation and the Indian Economy › INTERLINKING PRODUCTION ACROSS COUNTRIES — Internal project only — not in the Board exam (per CBSE 2026-27 curriculum)
Only 'What is Globalisation?' and 'Factors that have enabled Globalisation' are in the Board exam; the remaining sub-topics are the internally-assessed interdisciplinary project. [source: Course Structure — Economics, Chapter 4 (Subtopics evaluated in Board)]A large American food company buys out a smaller Indian edible oil company and takes control of its refineries and marketing network. What does this example illustrate about how MNCs expand their production in other countries?
Generated by claude-sonnet-4-6 · 2026-06-26 13:23 · grounding rag
Model Answer
This example illustrates that buying up local companies is the most common route through which MNCs expand production in other countries. Just as Cargill Foods (an American MNC) bought Parakh Foods and took control of its four oil refineries and marketing network, MNCs use their enormous wealth to acquire local companies and expand production, becoming dominant players in that market.
Source: Chapter 4, Interlinking Production Across Countries
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Explanation
- Examiners expect you to name the method (buying/acquiring local companies) and link it to the example — here Cargill + Parakh Foods is the textbook case that exactly matches the question.
- State why MNCs do this: they have huge wealth and use acquisitions to quickly gain control of existing infrastructure (refineries, networks) rather than building from scratch.
- Avoid writing a general essay on MNCs; stick to the specific mechanism asked — "how MNCs expand production."