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Eco CHP 10

The document discusses the concepts of domestic and foreign trade, highlighting India's role as a supplier of raw materials and an importer of manufactured goods. It outlines the types of foreign trade, including import, export, and entrepot trade, and emphasizes the importance of foreign trade in earning foreign exchange and promoting investment. Additionally, it covers the balance of payments and balance of trade, defining them and explaining their significance in the context of international economic transactions.

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6 views3 pages

Eco CHP 10

The document discusses the concepts of domestic and foreign trade, highlighting India's role as a supplier of raw materials and an importer of manufactured goods. It outlines the types of foreign trade, including import, export, and entrepot trade, and emphasizes the importance of foreign trade in earning foreign exchange and promoting investment. Additionally, it covers the balance of payments and balance of trade, defining them and explaining their significance in the context of international economic transactions.

Uploaded by

manashree1924
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Eco Chp 10 imp points' sub points

(Buying or selling goods, services within the boundaries- Internal


Trade or Domestic Trade)
Foreign Trade Intro:
●​ India:
○​ Supplier of raw materials to England n other industrialised
nations
○​ Importer of manufactured goods
●​ Trade between different countries of the world
●​ Also called international trade or external trade
●​ Wasserman and Hultman: " International Trade consists of
transaction between residents of different countries

Types of Foreign Trade:


●​ Import Trade
●​ Export Trade
●​ Entrepot Trade

Role of Foreign Trade:


●​ To earn foreign exchange
●​ Encourages investment
●​ Division of labour and specialization
●​ Optimum allocation and utilization of resources
●​ Stability in price level
●​ Availability of multiple choices
●​ Brings reputation and helps earn goodwill
Composition and Direction of India's Foreign Trade
●​ Increasing share of Gross National Income
●​ Increase in volume and value of trade
●​ Change in the composition of exports
●​ Change in the composition of imports
●​ Oceanic trade
●​ Development of new ports

Direction of India's Foreign Trade


●​ Prior independence- major part of trade w Britain
●​ Post independence- USA, Germany, Japan, UK

Concept of Balance of Payments


●​ Systematic record of all international economic transactions of
that country during a given period, usually a year
●​ Walter Krause: " The balance of payments of a country is a
systematic record of all economic transactions completed
between its residents sn the rest of the world during a given
period if time usually s concept of year"

Balance of Trade:
●​ Difference between the value of exports and imports of a
country
●​ Samuelson: "if export value is greater than the import value it is
called as trade surplus and if import value is greater than export
value then it is called as trade deficit"
●​ Bentham: " Balance of Trade of a country is the relation over a
period between the values of her exports and imports of
physical goods"

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