Question

“Foreign trade is an important component of globalisation”. Explain any three points in this regard.

Answer 1

Foreign trade is central to globalisation for several reasons:

1. Cross‑border exchange of goods and services encompasses foreign trade, the exchange of products and services between countries, and is a basic mechanism of economic integration.
2. Enlarges markets by selling abroad with producers that can expand their market size beyond domestic limits, boosting production, specialization, and economies of scale.
3. Integrates markets and widens consumer choice by linking national markets through trade, allowing consumers access to goods produced anywhere and aligning prices, standards, and supply chains across countries.