Countries cannot live in isolation. They have to mutually share their prosperity, technical know-how and undertake trade in order to sell their surplus products. The world economy is inter-dependent. Economic progress of a nation would depend upon its ties with other countries.
How does a country benefit from trade relations?
Countries maintain trade relations with each other. The exchange of goods and services between countries is known as international trade. A country requires a market for its goods. Markets are available locally as well as internationally.
A businessman or woman has to make profits by selling his or products in the market. They should be buyers. In case, there are no buyers, the products will lie waste. Similarly, services also need to be availed of. The provider of services makes his or her income when people make use of their services and pay for it. In other words, both seller and buyer are important in business process.
At the local level, the citizens make use of the services and buy products for their personal consumption. At the international level, at times a respective Government plays a major role in the selling of a product by an international producer of another country. Often you come across machinery parts and machines as well which have been produced in another country. Garments are also exported. India exports its cottons to the Western world. One comes across Taiwanese or Chinese imports in India as well as those of Japan.
Benefits of International Trade – Advantage of international trade
Disadvantage of international trade
International trade is beneficial to world economy. It adds to the money coffers of the world at large. Every country can benefit monetarily if it is able to dispose off its surplus goods after meeting the requirements of the local people.