International Trade Overview
International trade refers to the exchange of goods among people, states, and nations, enabling markets to operate effectively across borders. Importantly, trade is often categorized as international when it occurs between different countries through various transportation methods, including sea, air, or land routes. As local trade pertains to intra-country exchanges, international trade is crucial for understanding global economic dynamics.
It serves as an economic indicator, where an advancement in trade is typically seen as a sign of economic prosperity for a country. Key elements in international trade include exports (goods or services sold to other countries) and imports (goods or services purchased from other countries). The balance of trade, the difference between the value of exports and imports, directly impacts a nation's economy.
A favourable balance occurs when exports exceed imports, contributing positively to the national income. Conversely, an unfavourable balance arises when imports surpass exports, leading to potential economic disadvantages. India's international trade spans various commodities such as gems, jewellery, chemicals, and agricultural products, implying its dynamic economic interactions with countries worldwide. Thus, international trade is not only vital for economic growth but also fosters global partnerships and relationships between nations.