The Making of a Global World

Why this chapter matters for UPSC: This is Chapter III of NCERT's India and the Contemporary World II (Reprint 2026-27), the first chapter of Section II, "Livelihoods, Economies and Societies". Its argument: what we call globalisation, "an economic system that has emerged since the last 50 years or so", has "a long history – of trade, of migration, of people in search of work, the movement of capital, and much else". It feeds GS1 world and modern Indian history, and the vocabulary of GS2 and GS3 answers on the IMF, the World Bank and globalisation.

Contemporary hook: NCERT's "effective right of veto" still holds. The IMF has 191 members (IMF factsheet, last updated April 2025), and the US holds 16.49 per cent of the votes (IMF table of quotas and votes, read October 2026). The Articles require "An eighty-five percent majority of the total voting power" to change quotas, so 16.49 per cent is enough to block a change. The veto is arithmetic from those two figures.

🧠 First Principles — Read This First

Globalisation is old. "All through history, human societies have become steadily more interlinked." Traders, priests and pilgrims carried goods, ideas "and even germs and diseases". What changes is the scale and the rules.

Three flows. International economic exchange has three movements: trade (in the nineteenth century "largely to trade in goods"), labour ("the migration of people in search of employment") and capital ("for short-term or long-term investments over long distances"). They were "closely interwoven", though "labour migration was often more restricted than goods or capital flows".

A world economy runs on settlement. Britain balanced its deficits with some countries through its surplus with India: "a multilateral settlement system", in which one country's deficit with another is "settled by its surplus with a third country". The same surplus paid India's "home charges".

Instability teaches the rules. The First World War "plunged the first half of the twentieth century into a crisis that took over three decades to overcome". Two lessons followed: mass production needs mass consumption, hence stable incomes and full employment, which markets alone cannot guarantee; and full employment needs governments able "to control flows of goods, capital and labour". Bretton Woods built these into institutions; its collapse opened the era of floating exchange rates and relocated industry.

PART 1 — Quick Reference

Table 1: Timeline of the chapter

Source: NCERT, India and the Contemporary World II, Class X, ch. III "The Making of a Global World", Reprint 2026-27, pp. 53-78; ch. II "Nationalism in India", pp. 39 and 42 (the 1930 row); other bodies as named, linked in the Sources list.

Table 2: The three flows, with an Indian example of each (NCERT exercise 7)

Source: NCERT ch. III, pp. 57-58, 64-67.

Table 3: NCERT's numbers, and the period each describes

Source: NCERT ch. III, pp. 55-75. Every figure is NCERT's, quoted as printed; NCERT itself marks several as estimates.

Table 4: The Bretton Woods institutions, then and now

Source: NCERT ch. III, p. 75; IMF factsheet "The IMF at a Glance" and table of members' quotas and votes; IMF Articles of Agreement, Art. III; World Bank member countries page; IBRD press release No. 44 (9 May 1947); WTO, "What is the WTO?" (links in the Sources list).

Table 5: Causes of the Great Depression (NCERT exercise 8)

Source: NCERT ch. III, pp. 69-72.

Table 6: NCERT lines to read with care

Source: NCERT ch. III, pp. 55, 61-65, 73; NCERT ch. II, pp. 39 and 42; Charter of Massachusetts Bay, 1629 (Avalon Project, Yale); Massachusetts Historical Society; Livingstone Online; NALIS; UK Hansard, 24 February 1920; National Archives of Trinidad and Tobago (links in the Sources list).

PART 2 — Concepts & Narrative

The pre-modern world

NCERT opens by correcting the everyday idea of globalisation. "As early as 3000 BCE an active coastal trade linked the Indus valley civilisations with present-day West Asia." Maldivian cowries, "used as a form of currency", reached China and East Africa, and germs travelled too.

Silk routes. Historians have identified "several silk routes, over land and by sea", carrying Chinese silk and pottery and the textiles and spices of India and Southeast Asia, while "precious metals – gold and silver – flowed from Europe to Asia". "Trade and cultural exchange always went hand in hand": Christian missionaries "almost certainly" used the routes, Muslim preachers later, and Buddhism spread from eastern India "through intersecting points on the silk routes".

Food. Noodles may have travelled west from China, though "the truth about their origins may never be known". Potatoes, soya, groundnuts, maize, tomatoes, chillies and sweet potatoes "were not known to our ancestors until about five centuries ago"; they came from America's original inhabitants after Columbus. New crops could decide life and death: Ireland's poorest peasants so depended on the potato that when disease destroyed it "in the mid-1840s, hundreds of thousands died of starvation" (NCERT's caption: "around 1,000,000", Table 3).

Conquest, disease and trade. The world "shrank greatly in the sixteenth century" as European sailors reached Asia by sea and crossed to America. The Indian subcontinent had been "central to these flows"; Europeans redirected them towards Europe. American silver "enhanced Europe's wealth and financed its trade with Asia". The Spanish conquerors' decisive weapon "was not a conventional military weapon at all. It was the germs such as those of smallpox", against which the long-isolated original inhabitants had no immunity. Guns could be captured and turned on the invaders, "But not diseases".

Europe's push outward had causes at home: "poverty and hunger were common", cities were crowded and "religious dissenters were persecuted", so thousands fled to America, where by the eighteenth century slave-worked plantations grew cotton and sugar for Europe. "Until well into the eighteenth century, China and India were among the world's richest countries", but from the fifteenth century "China is said to have restricted overseas contacts", and with the Americas rising, "Europe now emerged as the centre of world trade".

The nineteenth century (1815-1914): a world economy takes shape

"The world changed profoundly in the nineteenth century." NCERT starts with food in Britain. Population growth raised the demand for grain, and "Under pressure from landed groups, the government also restricted the import of corn" through the Corn Laws. "Unhappy with high food prices, industrialists and urban dwellers forced the abolition of the Corn Laws." The chain: cheaper imports; British agriculture "unable to compete"; "Vast areas of land were now left uncultivated"; men and women "flocked to the cities or migrated overseas". Falling food prices raised consumption, and new farmland in Eastern Europe, Russia, America and Australia needed capital, which "flowed from financial centres such as London", and labour.

"Thus by 1890, a global agricultural economy had taken shape", its food grown far away and carried by "low-paid workers from southern Europe, Asia, Africa and the Caribbean". India's version was west Punjab, where canals were built "to transform semi-desert wastes into fertile agricultural lands that could grow wheat and cotton for export": the Canal Colonies. Overall, "between 1820 and 1914 world trade is estimated to have multiplied 25 to 40 times".

Role of technology

Railways, steamships and the telegraph mattered, but "technological advances were often the result of larger social, political and economic factors". Meat shows the chain. "Till the 1870s, animals were shipped live from America to Europe", and meat stayed "an expensive luxury beyond the reach of the European poor". Refrigerated ships carried frozen meat instead and cut costs; the poor added "meat (and butter and eggs)" to bread and potatoes, and "Better living conditions promoted social peace within the country and support for imperialism abroad." This, with the potato, answers exercise 4.

Late nineteenth-century colonialism and rinderpest

The expansion had "a darker side": a closer link with the world economy "also meant a loss of freedoms and livelihoods". "In 1885 the big European powers met in Berlin to complete the carving up of Africa between them." Belgium and Germany became colonial powers, and the US one "in the late 1890s by taking over some colonies earlier held by Spain".

Rinderpest. Africa had "abundant land and a relatively small population", and people "rarely worked for a wage", so Europeans who came for plantations and mines found "a shortage of labour willing to work for wages". Employers used heavy taxes, inheritance laws letting "only one member of a family" inherit land, and mine compounds. Then rinderpest, a cattle plague, "arrived in Africa in the late 1880s" with cattle "imported from British Asia to feed the Italian soldiers invading Eritrea", moved west "like forest fire", reached the Atlantic coast in 1892 and the Cape five years later, and killed "90 per cent of the cattle". Colonisers "monopolised what scarce cattle resources remained", forcing Africans into wage work: "Control over the scarce resource of cattle enabled European colonisers to conquer and subdue Africa."

Indentured labour migration from India

NCERT uses indenture to show "the two-sided nature of the nineteenth-century world": growth for some, "new forms of coercion in others". Indian indentured labourers worked under contracts "which promised return travel to India after they had worked five years".

Who went, and why. Most came from "eastern Uttar Pradesh, Bihar, central India and the dry districts of Tamil Nadu", where "cottage industries declined, land rents rose, lands were cleared for mines and plantations", and the poor fell into debt. The main destinations were "the Caribbean islands (mainly Trinidad, Guyana and Surinam), Mauritius and Fiji"; Tamil migrants went to Ceylon and Malaya, and workers were recruited for Assam's tea plantations. Beyond the book: UNESCO records that Britain chose Mauritius in 1834 as "the first site" of its "great experiment".

How they were recruited. Agents paid "a small commission" gave "false information about final destinations, modes of travel, the nature of the work, and living and working conditions"; migrants were often not told of the sea voyage, and agents "even forcibly abducted less willing migrants". Indenture "has been described as a 'new system of slavery'": conditions were harsh, "and there were few legal rights".

What they made. Workers escaped into the wilds or built "new forms of individual and collective self-expression": Trinidad's Muharram procession became "a riotous carnival called 'Hosay' (for Imam Hussain)", Rastafarianism "is also said to reflect" Indian links, and "'Chutney music', popular in Trinidad and Guyana," expresses the post-indenture experience. Most workers stayed; NCERT names V.S. Naipaul, Shivnarine Chanderpaul and Ramnaresh Sarwan. "From the 1900s India's nationalist leaders began opposing the system of indentured labour migration as abusive and cruel"; NCERT dates its abolition to 1921 (Table 6). Descendants long remained "an uneasy minority in the Caribbean islands".

Indian entrepreneurs and India in the global system

Bankers and traders. The Shikaripuri shroffs and Nattukottai Chettiars "financed export agriculture in Central and Southeast Asia, using either their own funds or those borrowed from European banks". Hyderabadi Sindhi traders "ventured beyond European colonies" and, from the 1860s, "established flourishing emporia at busy ports worldwide".

From cloth to raw materials. British tariffs on cloth imports meant "the inflow of fine Indian cotton began to decline". Cotton textiles fell from "some 30 per cent" of India's exports around 1800 to "below 3 per cent" by the 1870s, while raw cotton rose from 5 to 35 per cent (1812-1871). Opium shipments to China "grew rapidly from the 1820s to become for a while India's single largest export", paying for Britain's "tea and other imports from China".

Settlement and home charges. Britain sold far more to India than it bought, ran "a 'trade surplus' with India" and used it to balance deficits elsewhere: "By helping Britain balance its deficits, India played a crucial role in the late-nineteenth-century world economy." The surplus also paid the "home charges": "private remittances home by British officials and traders, interest payments on India's external debt, and pensions of British officials in India".

The inter-war economy

The war. The Allies (Britain, France and Russia, later the US) fought the Central Powers (Germany, Austria-Hungary and Ottoman Turkey) for "more than four years", "the first modern industrial war". Its "9 million dead and 20 million injured" were mostly men of working age, so Europe's workforce and household incomes shrank. Britain borrowed from the US, and the war "transformed the US from being an international debtor to an international creditor".

Post-war recovery. Britain, carrying "huge external debts" and facing new industries in India and Japan, slid into a prolonged crisis: "in 1921 one in every five British workers was out of work". When east European wheat returned, the output Canada, America and Australia had expanded became a glut.

Mass production and consumption. The US recovered faster. Henry Ford adapted the assembly line "of a Chicago slaughterhouse" to his Detroit plant; cars came off it "at three-minute intervals". Workers quit under the strain, so "Ford doubled the daily wage to $5 in January 1914" while he "banned trade unions from operating in his plants", and later called the rise his "best cost-cutting decision". US car production rose "from 2 million in 1919 to more than 5 million in 1929", consumer durables were bought on "hire purchase", and in 1923 the US "resumed exporting capital to the rest of the world and became the largest overseas lender". "All this, however, proved too good to last."

The Great Depression, and India

"The Great Depression began around 1929 and lasted till the mid-1930s." Its timing varied, but "agricultural regions and communities were the worst affected". NCERT's two causes, agricultural overproduction and the withdrawal of US loans, are in Table 5. The US was "the industrial country most severely affected": "by 1933 over 4,000 banks had closed and between 1929 and 1932 about 110,000 companies had collapsed". "By 1935, a modest economic recovery was under way in most industrial countries".

India in the Depression. India's exports and imports "nearly halved between 1928 and 1934", and wheat prices fell by 50 per cent. "Peasants and farmers suffered more than urban dwellers": prices collapsed, but "the colonial government refused to reduce revenue demands". In Bengal "the price of raw jute crashed more than 60 per cent"; the jute growers' lament ends with traders who "will pay only Rs 5 a maund" (NCERT's Discuss question: the gain went to the traders). Peasants used up savings, mortgaged land and sold jewellery, and "India became an exporter of precious metals, notably gold". Keynes thought these exports "promoted global economic recovery"; they "certainly helped speed up Britain's recovery, but did little for the Indian peasant". Rural India was "seething with unrest" when Civil Disobedience began (on the year, see Table 6). For urban people on fixed incomes "Everything cost less", and the government "extended tariff protection to industries, under the pressure of nationalist opinion".

Rebuilding a world economy: Bretton Woods

The Second World War was fought between the Axis powers ("mainly Nazi Germany, Japan and Italy") and the Allies ("Britain, France, the Soviet Union and the US"); "At least 60 million people, or about 3 per cent of the world's 1939 population, are believed to have been killed". Reconstruction was shaped by the US, "the dominant economic, political and military power in the Western world", and by the Soviet Union.

The post-war system built in the two lessons of First Principles. Its framework "was agreed upon at the United Nations Monetary and Financial Conference held in July 1944 at Bretton Woods in New Hampshire, USA", which set up the IMF "to deal with external surpluses and deficits of its member nations" and the World Bank "to finance post-war reconstruction": the "Bretton Woods twins", which "commenced financial operations in 1947". "The US has an effective right of veto over key IMF and World Bank decisions." The rupee was "pegged to the dollar at a fixed exchange rate", and the dollar "was anchored to gold at a fixed price of $35 per ounce of gold". The conference dates, the 44 nations and the first loan are in Table 1.

"The Bretton Woods system inaugurated an era of unprecedented growth of trade and incomes for the Western industrial nations and Japan": world trade grew at over 8 per cent a year from 1950 to 1970.

Decolonisation, the G-77 and the end of Bretton Woods

Most colonies in Asia and Africa became independent within two decades of 1945, but poor and "handicapped by long periods of colonial rule". The IMF and the World Bank "were designed to meet the financial needs of the industrial countries" and turned to developing countries only "from the late 1950s"; "Ironically", the new nations came "under the guidance of international agencies dominated by the former colonial powers". Left out of the boom, they organised as "the Group of 77 (or G-77)" to demand a new international economic order (NIEO): "real control over their natural resources, more development assistance, fairer prices for raw materials, and better access for their manufactured goods in developed countries' markets". That answers exercise 9. Beyond the book: the G-77 now has 134 members (g77.org, read October 2026); its founding and the NIEO Declaration are dated in Table 1.

The end of fixed rates. "From the 1960s the rising costs of its overseas involvements weakened the US's finances and competitive strength", and the dollar's weakness against gold "eventually led to the collapse of the system of fixed exchange rates and the introduction of a system of floating exchange rates" (beyond the book: 15 August 1971 to March 1973, Table 1). From the mid-1970s developing countries borrowed from Western commercial banks, with "periodic debt crises", "especially in Africa and Latin America". "From the late 1970s MNCs also began to shift production operations to low-wage Asian countries." New economic policies in China and the collapse of Soviet-style communism brought many countries back "into the fold of the world economy", and "In the last two decades the world's economic geography has been transformed as countries such as India, China and Brazil have undergone rapid economic transformation."

Did the 2020-21 edition differ?

No. The chapter was Chapter III in the 2020-21 edition, with the same text, figures and exercises; the slips in Table 6 were already there.

Source: NCERT ch. III, 2020-21 edition (jess303.pdf in the whole-book zip, Wayback Machine capture of 9 October 2021).

PART 3 — UPSC Integration

Frames for Mains Answers

1. Globalisation is not new, but it has changed. Pre-modern links (Indus-West Asia trade, silk routes, food and germs); the nineteenth century's three flows (world trade up 25 to 40 times, 1820-1914); after the 1970s, floating rates, private lending to developing countries and MNCs moving to low-wage countries.

2. Why the indentured went, and what they kept (gs1-pyq-2018-13). Push: declining cottage industries, rising rents, debt. Deceit: agents' false information. Conditions: a "new system of slavery". Identity: Hosay, chutney music, Naipaul; an uneasy minority after abolition.

3. Policy instruments against the Depression (gs1-pyq-2013-14). In the chapter: tariffs (US duties doubled; Indian tariff protection under nationalist pressure), small allowances to the unemployed in many US states, and the post-war lessons: governments stabilising prices, output and employment and controlling flows of goods, capital and labour, with fixed exchange rates under Bretton Woods. The New Deal lies beyond the chapter.

4. The Bretton Woods twins: one origin, two mandates (gs2-pyq-2013-01). IMF for "external surpluses and deficits"; IBRD to "finance post-war reconstruction", later development. Shared: the 1944 conference, operations from 1947, Western control and the US "effective right of veto". Critique: built for industrial countries, hence the G-77 and the NIEO.

Exam Strategy

Prelims fact-traps:

• Check Table 6 before quoting NCERT on indenture: its Trinidad caption ("early nineteenth century") and "abolished in 1921" do not fit the record.
• Ford doubled the wage to $5 in January 1914 but banned trade unions; the US resumed lending abroad in 1923.
• The IMF and the World Bank turned to developing countries only "from the late 1950s"; the G-77 then demanded the NIEO.

Mains: use NCERT's chains (Corn Laws → migration; rinderpest → labour market; US loans → global slump) as answer skeletons, and date every number.

Practice Questions

NCERT's exercises for this chapter have no MCQs. Practice (UPSC-pattern, not past papers): questions 1-5.

1. With reference to rinderpest in Africa in the late nineteenth century, consider the following statements:
1. It entered Africa through the Cape and moved north.
2. It was carried by infected cattle imported from British Asia to feed Italian soldiers invading Eritrea.
3. It killed about 90 per cent of the cattle along its path.
Which of the statements given above are correct?
(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3

Answer: (b). It entered in the east, reached the Atlantic coast in 1892 and the Cape five years later.

2. Under the Bretton Woods system, consider the following statements:
1. National currencies such as the Indian rupee were pegged to the US dollar at a fixed rate.
2. The US dollar was anchored to gold at $35 per ounce.
3. The IMF was set up to finance post-war reconstruction.
Which of the statements given above are correct?
(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3

Answer: (a). Reconstruction finance was the IBRD's task; the IMF dealt with external surpluses and deficits.

3. A "multilateral settlement system", as NCERT uses the term for Britain and India, means:
(a) Britain's trade with each country balanced bilaterally.
(b) One country's deficit with another is settled by its surplus with a third country.
(c) Debts settled through the IMF.
(d) India's deficits with Britain settled by gold exports.

Answer: (b).

4. Which of the following pairs are correctly matched?
1. Shikaripuri shroffs: financed export agriculture in Central and Southeast Asia
2. Hosay: a Muharram procession turned carnival in Trinidad
3. Canal Colonies: irrigated lands in west Punjab growing wheat and cotton for export
Select the correct answer:
(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3

Answer: (d).

5. NCERT writes that "the making of the global world has a long history". Discuss with reference to the flows of trade, labour and capital before 1914. (150 words)

NCERT exercises (where the answers are on this page): 1 silk routes and Columbian foods; 2 smallpox in the Americas; 3 (a) Corn Laws chain, (b) rinderpest, (c) war deaths and household incomes, (d) India in the Depression, (e) MNC relocation; 4 the potato and refrigerated ships; 5 Bretton Woods; 6 Source A and the indenture section; 7 Table 2; 8 Table 5; 9 the G-77 paragraph.

📦 Revision Capsule

Sources

• NCERT, India and the Contemporary World II, Textbook in History for Class X, ch. III "The Making of a Global World", Reprint 2026-27 — ncert.nic.in PDF.
• NCERT, India and the Contemporary World II, ch. II "Nationalism in India", Reprint 2026-27 — ncert.nic.in PDF.
• NCERT, India and the Contemporary World II, 2020-21 edition (whole-book zip), as archived on 9 October 2021 — Wayback Machine.
• UNESCO World Heritage Centre, "Aapravasi Ghat" — whc.unesco.org.
• National Library and Information System Authority (NALIS), Trinidad and Tobago, "Indian Arrival Day" — nalis.gov.tt.
• UK Parliament, House of Commons written answer, "Indentured Labour (Crown Colonies and Protectorates)", 24 February 1920, vol. 125 c1514W — Hansard.
• National Archives of Trinidad and Tobago, "End of Indentureship" (2017) — natt.gov.tt PDF.
• The Charter of Massachusetts Bay, 1629 — Avalon Project, Yale Law School.
• Massachusetts Historical Society, John Winthrop's journal (catalogue record) — masshist.org.
• Livingstone Online — livingstoneonline.org.
• The Henry Ford, "Ford's Five-Dollar Day" (2014) — thehenryford.org.
• World Bank Archives, "Bretton Woods and the Birth of the World Bank" — worldbank.org.
• IBRD press release No. 44, announcement of the loan to France, 9 May 1947 — World Bank documents.
• US Department of State, Office of the Historian, "Nixon and the End of the Bretton Woods System, 1971-1973" — history.state.gov.
• IMF, "The end of the Bretton Woods System (1972-81)", as archived on 17 January 2024 — Wayback Machine.
• Group of 77, "About the Group of 77" — g77.org.
• UN General Assembly resolution 3201 (S-VI), Declaration on the Establishment of a New International Economic Order, 1 May 1974 — UN documents.
• IMF, "The IMF at a Glance" — imf.org; "IMF Members' Quotas and Voting Power" — imf.org.
• IMF, Articles of Agreement, as archived on 25 December 2024 — Wayback Machine.
• World Bank, "Member Countries" — worldbank.org.
• WTO, "What is the WTO?" — wto.org.
• US Department of State, Office of the Historian, "The Collapse of the Soviet Union" — history.state.gov.