Nature of International Business
Countries across the world are endowed with natural resources of various kinds. But no single country uniquely possesses all natural resources required for its people. Due to varying climatic conditions prevailing across the world certain resources are abundantly available in some countries, while these resources may not exist or may not be available to the required extent in other parts of the countries. This situation paves way for international business. In other words countries with surplus resources have to exchange them with other countries for its deficit resources. For example, Gulf countries are super rich in petroleum resources but they do not have any other essential resources needed for human existence. Hence they have to exchange the surplus petroleum resources to buy other essential resources from other countries where they are available abundantly.
Similarly some advanced countries produce goods and services of good quality at affordable prices using sophisticated techniques. The developing countries and least developed countries cannot afford to produce those goods with their limited technical knowhow. In such a case international business enables these countries to buy those goods from advanced countries. This makes it necessary for international business
In short uneven distribution of natural resources across the world and specialisation attained by certain countries in the production of certain products push those countries to exchange goods and services with one another. This exchange a warrants International trade or International business.
Today we live in a world where the obstacles to the exchange of the goods and technology have been substantially reduced. Due to advancement of technology the national economies are increasingly becoming borderless and getting progressively integrated into the world economy. The contemporary world is called as ‘global village’. Business in today’s context is not restricted to the mere boundaries of the country but also expands to boundaries of the several other countries. Due to tremendous development in the information and communication technology (ICT ) and rapid advancement in transportational system more and more firms engage in international business which presents them with numerous opportunities for their faster economic growth and increased gains.
India has been trading with other countries fairly for a long period of time. It has played a vital role in international business from the ancient period. But it has of late considerably speeded up the process of integrating with the world economy and phenomenally increased its foreign trade and investments.