Essay On Importance Of International Trade

Introduction: International trade is the exchange of capital, goods and services across the international boarder or territories. In most of the country it represents a significant share of the domestic GDP of the country.
Importance of International Trade: International trade consider as a backbone of our Morden commercial world. Producers of the various nations try to make profit through expanding the market rather than be limited to selling within their own boarders. Lower production cost in one region versus other regions, specialized industries, lack or surplus of natural resources and consumer tastes etc., are the various reasons for the occurrence of trade across the countries. Apart from these some importance of the international trade are as follows:

(i) International Trade enables the fuller

Some countries produce more than their own requirement. They sell this surplus production in other countries and avoid the occurrence of deflationary pressures in the domestic economy.

(v) International Trade encourages countries to compete with each other in the production of different kinds of goods at low cost of production. Competitiveness stimulates productivity.

(vi) It widens the extent of market. Every country makes an attempt to produce different goods in large quantity. This induces production on large scale and thereby generates economies of scale.

(vii) International Trade stimulates the spirit of competition among the entrepreneurs. Novel techniques of production are devised to produce quality goods at low cost. Advancement of technology is the key to economic development.

(viii) International Trade promotes mutual cooperation among different countries. It creates an atmosphere of goodwill and friendship among the trading countries in other words trade has been consider as the engine that establishes international communication and sharing of