International Trade and Import & Export

If you happen walk into a store in London and are able to buy a Banarasi Sari (a Traditional Indian women dress) then you are experiencing the effects of International Trade.

For any Nation that is considered to be a world power, International Trade is an important source of economic revenue and may even have a significant share of gross domestic product (GDP). International Trade has been taking place between countries since medieval times through trade routes like Silk Route etc. In today’s modern times due to industrialization the face of International trade has changed through MNC’s, outsourcing and globalization.

In simple words the exchange of certain specific technologies, capital, goods and services (in bulk) between nations as per their requirements is International Trade. It opens up a sea of opportunities for the nations. International trade allows nations to expand their markets for both goods and services that otherwise may not have been available in other countries. Import and Export is the basic method by which the International Trade occurs. Nature has not endowed everyone with everything, some nations have something and some others have the other things. So in this context it becomes all the more important for trade to take place between the nations. Importing means getting something you need from other nation and exporting means giving other countries what they need from you. A great way to expand your business internationally is by importing and exporting goods. Companies taking part in international business have been known to grow faster and fail lesser.

International trade gives rise to a world economy where supply and demand or prices of the goods and services are affected by global events. Political change in India, for example, might result in an increase in the cost of labor and raw materials, thereby increasing the manufacturing costs for an American Garment manufacturing company based in India, which would then result in an increase in the price in the American Market. This type of trade brings not only increases the efficiency but also increases the opportunity of Foreign Direct Investment in the country. It also helps the countries embark the path of specialization and therefore make more efficient use of resources, international trade has potential to maximize a country’s capacity to produce and acquire goods for example India is world known for IT services, Japan for it’s Technological know-how, China for bulk and cheap manufacturing etc.

Global Trade also gives consumers and countries the opportunity to be introduced to goods and services not available in their own countries. If companies are ready for international trade, the government in each country offers a number of programs to help them get started. There are very strict regulations on import and export business so it is critical that firms understand which of these regulations apply to them and the implications. They also have to abide by the trade agreements regarding the goods between the two nations.

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