Foreign trade is the exchange of goods and services among various nations. International trade, external trade, and interregional trade are other names for it. Both imports and exports are part of it. The following are some ways that foreign commerce aids in the integration (connection) of markets:
- Facilitate international trade in products and services.
- Transport people, ideas, and technology more easily.
- Gives producers the chance to sell their goods outside of the domestic and local markets.
- Customers have more product options.
- Heightened rivalry between producers to improve the quality of products and services offered
How Chinese toys supplanted Indian toys because they were more affordable and of higher quality is an illustration of international commerce in India.
How our markets have been transformed in recent years?
The movement of globalization has changed our markets in recent years in the following ways:
- Some of us have a large selection of products and services to choose from as consumers in the modern world. We have access to the most recent versions of digital cameras, mobile phones, and televisions produced by top global manufacturers.
- New car models can be seen on Indian roads every season. The days when the sole vehicles on Indian roads were Ambassador and Fiat are long gone.
- Due to globalization and foreign trade, Indians now purchase automobiles from almost all of the world’s leading manufacturers.
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Similar to this, there are many different brands available on the market, including those for processed fruit juices, televisions, clothing, candies, and even chocolates.
Local businesses in India are now embracing innovative technologies and production techniques as a result of the entry of MNCs. Consumers in Indian markets are now living considerably better than ever because of this shifting structure of manufacturing.
Frequently Asked Questions-
Que 1. How does working with big corporations help local businesses?
Ans- Collaboration between local and multinational businesses benefits local businesses in the following ways:
- MNCs can fund the local businesses’ further investments, such as the purchase of new machinery for increased production.
- MNCs may offer businesses the most recent technology for effective production because MNCs have a global reach.
- Through a partnership with an MNC, local businesses will see financial gains as production and efficiency would inevitably rise.
Que 2. Describe globalization.
Ans- The process of quickly integrating or connecting several nations is known as globalization. MNCs are actively contributing to the process of globalization. Technology, investments, and the movement of products and services between nations are increasing. There is still another method the nations can be linked. This is accomplished through international migration.
Que 3. Name one distinctive quality of a “Special Economic Zone”?
Ans- The government creates Special Economic Zones, or SEZs, which are industrial areas with top-notch infrastructure, including roads, water, energy, storage, transportation, and recreational and educational amenities. Businesses that establish production facilities in SEZs are initially exempt from taxes for five years.
Que 4. What exactly do you mean when you say “foreign direct investment”?
Ans- Foreign enterprises or multinational corporations (MNCs) who want to increase capacity and production to make money invest foreign capital in a nation’s economic and productive operations.
Que 5. What does the term trade barrier mean?
Ans- Trade barriers are governmental impediments or limitations placed on unrestricted import and export operations. Import taxes are an example of a trade barrier since they drive up the cost of imported goods. The government can decide what types of commodities and how much of each should enter the country by using a trade barrier like a “tax” to enhance or decrease (regulate) foreign trade.