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