International Trade, in simple language, is the buying and selling of goods or services between countries. The relation between the countries which is maintained due to these economic transactions are called International Trade Relations. International trade is also known as global trade as it is carried out across the globe, transcending international borders.

Usually, the country exports those commodities which it has in abundance and in return imports those which it lacks. In other words, it is just a give and take relationship. In this relation, nations are always better off. Various factors such as globalization, advancement in technology, outsourcing, changes in transportation etc. have had a great impact on international trade relations. The doors of new markets have been opened to consumers because of international trade. It provides a comparative advantage to a particular country over another country.

Let’s take a look at some interesting facts  about International Trade Relations-

• There are three types of international trade namely Import, Export and Re-export , also known as entrepot.
• Import Trade- It is all about buying the goods or services from foreign countries. Ex- India imports crude oil from countries like UAE.
• Export Trade- Contrary to import, it comprises selling locally manufactured goods or services to foreign countries. Ex- China exports electrical equipment, silk etc.
• Entrepot trade- It is made up of both import and export. In this, goods or services are imported from one country so that they can be further exported to another country.
• It provides comparative advantages to the country. The purpose of comparative advantage is to illustrate gains from international trade.
• In the book “Wealth of Nations”, Adam Smith demonstrated the advantages of removing trade restrictions.
• According to research, International trade contributes to increased incidence of diet related diseases.

Importance of international trade relations. International trade benefits the country in various ways, so it is quite important.

• It enables the country to attain a particular good or service at an affordable price.
• It also helps in improving living standards and reducing poverty. It promotes employment as well.
• Countries which are open to global trade tend to grow faster.
• It provides comparative advantages as it allows the country to export those things which it is good at.
• It encourages competition in the market and provides various options to the consumer. It is also good for local suppliers.

 International Trade Relations also have some disadvantages:

• The countries and companies in global trade are vulnerable to global events.
• This also affects new companies, many of which have limited resources.
• It may cause a threat to the national security of the country.
• It may also increase the pressure on natural resources.

There has been a lot of new buzz around international trade in the recent news.

• Some highlights include Piyush Goyal’s recent statement that India is on track to having higher exports. This is something we believe would provide ample opportunities to businesses in india. (https://economictimes.indiatimes.com/news/economy/foreign-trade/india-is-on-track-to-achieve-historic-highs-in-exports-piyush-goyal/articleshow/87698557.cms).
• We feel there is a lot of positive light for the growth of business as the Government of India is also trying to get into a trade agreement with the UK. Even Barton has stated that “We should be very optimistic. Things have really accelerated, and we should be very excited”! (https://economictimes.indiatimes.com/news/economy/foreign-trade/india-uk-looking-at-interim-trade-agreement-foreign-secretary-harsh-vardhan-shringla/articleshow/87186490.cms)
• Not only that, but India is excited to have trade worth 500 million USD with the USA.

All this shows how far we have come as a country and also how long our journey has been. Now it is upon us as the youth to get the best of all the opportunities in front of us! Seize the day my friend, carpe diem!

After a long informative read, let’s take a break and relax a bit. So we’ll be recapping the blog with a quick fun game 🙂