Thursday, February 7, 2008


Introduction :

Trade is the process of taking goods from the source of product or place of procurement to the consumers. It also implies exchange of goods. Trade may be classified into internal trade, external trade, wholesale and retail trade. The exchange of goods within the country is called Internal trade. The exchange of goods between the countries is called external or foreign trade. In wholesale trade, goods are sold to retailers in large quantities. In retail trade goods are sold in small quantities to the consumers. In this section, we shall discuss about the meaning, need, merits, demerits, types, agencies involved in internation trade, mutinational companies, globalizations and world trade organizations.


Trade between two or more nations is called international trade or foreign trade. For example, India’s trade with U.S.A, Japan, France, Pakistan etc., is called foreign trade or external trade. Foreign trade may be bilateral or multilateral. Trade between two countries is called as bilateral trade. Trade among many countries is called multilateral trade.

Types of foreign trade:

The foreign trade transactions are classified into three types as follows.

1. Import Trade

2. Export Trade

3. Entreport Trade


When goods are purchased from a foreign country it is called as import trade. For example when India buys petrol from Kuwait it is called as import trade.

Import Trade policy:

In almost all the countries, the government controls the import trade. The objectives of such control are

a)proper use of foreign exchange,

b) restrictions on imports of non-essential and luxury gods and

c)developing indigenous industries.

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