Importance And Importance Of International Trade

International trade is the exchange of capital, goods and services across international borders.. This type of trade gives rise to a world economy, in which prices or supply and demand are influenced by global events and factors. Political change in Asia, for example, could result in an increase in the cost of labor, thereby increasing the manufacturing costs for an American sneaker company based in Malaysia, which would then result in an increase in the price that you have to pay to buy the tennis shoes at your local mall. A decrease in the cost of labor, on the other hand, would result in you having to pay less for your new shoes. In many countries it is the major source of national income and facilitator of international relations. While international trade has been present throughout much of history, like silk route, it’s economic, social and political importance has been on rise in recent decades. Without international trade, nations would be limited to the goods and services produced within their own boundary. It is the backbone of our modern commercial world, as producers in various nations try to profit from selling within their own borders. There are many reasons that trade across national borders occur, including lower production costs in on region versus another, specialized industries, lack or surplus of natural resources, differences in the countries, differences in factor endowment etc.

India is a major player in the international market. It do both imports and