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International Trade

The exchange of goods among people, states and countries is called trade. Trade between two nations is called as international trade. The market is the place of exchange of commodities and services. International trade can take place through land, air or sea routes. Domestic trade may take place between local areas or between two or more states. The prosperity of a country is often determined by the volume of international trade. Export and import are two components of trade. When the value of exports is higher than imports, the country earns more revenue through trade; hence this is called favourable balance of trade. Similarly, if the net value of exports is less than imports, the country spends more and this is called unfavourable balance of trade. The major commodities exported from India are agriculture and related products, minerals and ores, gems and jewellery, engineering goods, chemical and petroleum products. The major commodities imported by India are petroleum and petroleum products, inorganic chemicals, coal and coke, bulk machineries, pearls and precious stones, etc. A large quantity of India’s foreign exchange is earned through the software and information technology sectors.

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