Meaning of International Business
National or Domestic Business can be defined as a transaction taking place within the geographical boundaries of a nation. It is also called as internal business or home trade. Manufacturing and trade outside the boundaries of one's own country is referred to as international business. International business has ventured into a new age of reforms. India too was not cut off from this. It was under a severe debt trap and was having a huge burden of payment crisis. In 1991, when India seeked International Monetary Fund (IMF) for raising funds to cope up and clear its debts and payment deficits. IMF though agreed to lend money to India laying a condition that India would undergo major changes in its structure to guarantee repayment of borrowed funds. India had no alternate option but to agree to the proposal. It was the this condition laid by IMF which forced India to widen its economic policies. Since then a good amount of liberalisation at the economic front happened. Though the process of reforms has somewhat slowed down, India is very much on the path to globalisation and integrating with the world economy. While, on the one hand, many multinational corporations (MNCs) have ventured into Indian market for selling their products and services and as a result many Indian companies had to step out of the country to market their products to customers abroad. It includes not only the international movements of goods and services, but also of assets and resources, personnel, technology and intellectual property like patents and trademarks. It may be noted here that mos people assume international business as international trade which is a misconception. Undoubtedly, international trade that includes exports and imports of goods, has historically been acknowledged as an important module of international business. But now, the scope of international business has considerably expanded. International trade related to services such as international travel and tourism, transportation, communication, banking, warehousing, distribution and advertising has significantly grown. The other important developments are increased foreign investments and foreign goods and services produced. Companies have started progressively making investments into foreign countries and are undertaking production of goods and services in foreign countries to become close to foreign customers that would enable them serve more effectively at lower costs. These activities form part of international business. We can conclude by saying that international business is a much wider term and includes both trade and production of goods and services across frontiers.