Question

Explain briefly the different types of Foreign trade?

Answer 1

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, meet consumer demands, and improve the 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

C. Entrepot Trade:

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

Example 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.