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Chapter: 11th Commerce : Types of Trade

Foreign trade: Meaning and Types

Foreign trade is a trade between a seller and buyer of different countries.

Foreign trade - Meaning

Foreign trade is a trade between a seller and buyer of different countries. It involves the exchange of goods and services of one country with another country. Mostly shipping and air transports are used for carriage of goods in international trade. The currencies of trading nations and commonly agreeable currency if any to both may be used in the said international trade.

E.g., Petrol and Aeroplanes.


Types of Foreign Trade

 

A. Import Trade

Import trade means buying goods from a foreign country for domestic use. Example. India  imports  petroleum  products  from Gulf Countries. India imports machinery, equipment, materials etc. It is necessary to speed-up industrialization, to meet consumer demands and to improve standard of living.


 

B. Export Trade

Export trade means the sale of domestic goods to foreign countries.

Examples:

1.        Export of Iron ore from India to Japan

2.        Selling of Tea from India to England.

3.        Export of jasmine flowers from Madurai to Singapore

Export trade is necessary to sell domestic surplus goods, to make  better  utilization of resources, to  earn  foreign  exchange,  to increase national income, to generate employment and to increase Government revenue


India’s Important Export and Import Items


 

C. Entrepot Trade

Entrepot trade means importing of goods from one country and  exporting  the  same  to foreign countries. It is also known as ‘Re- export trade’.

Eg. Indian diamond merchants in Surat import uncut raw diamonds from South Africa. They cut and polish the diamonds in their units in India and re-export them to the International Diamond Market in Amsterdam


Singapore, Dubai, Hongkong are the largest entrepot trade centres in the world

Thus it can be concluded that effective transfer of possession and ownership from the producer to  consumer  is  facilitated  by trade. After learning about the types of trade, channels of distribution, wholesalers and retailers will be studied.

 

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11th Commerce : Types of Trade : Foreign trade: Meaning and Types |


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