External Trade — Flashcards

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External Trade refers to the buying and selling of goods and services across national boundaries. It is also known as Foreign Trade or International Trade. For example, when India exports tea to the U…

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The three types of external trade are: (a) Import Trade – buying goods from foreign countries; (b) Export Trade – selling goods to foreign countries; (c) Entrepot Trade – importing goods to re-export …

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Import Trade is when a country purchases goods from another country. For example, India imports petroleum, gold, and electronic goods from countries like the USA, UAE, and Japan.

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Export Trade is when a country sells its goods to another country. For example, India exports tea, coffee, textiles, and iron and steel to countries like the USA, UK, and Germany.

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Entrepot Trade (or re-export) occurs when a country imports goods to export them to another country. It happens due to lack of direct trade routes, absence of trade agreements, or need for processing.

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Visible Trade involves tangible goods like machinery, tea, or textiles. Invisible Trade includes services such as shipping, insurance, tourism, and consultancy. For example, when India exports softwar…

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External Trade is important because it: (1) Promotes specialisation, (2) Improves standard of living, (3) Enhances competition, (4) Generates employment, (5) Equalises prices, (6) Strengthens internat…

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External trade allows countries to focus on producing goods they can make efficiently due to resources or technology. For example, Japan specialises in electronics, while India specialises in tea and …