Define Foreign Trade. Types of Foreign Trade.

Foreign Trade

Foreign trade is nothing but trade between the different countries of the world. It is also called as International trade, External trade or Inter-Regional trade. It consists of imports, exports and entrepot. The inflow of goods in a country is known as import trade whereas outflow of goods from a country is known as export trade. 

Many times goods are imported for the purpose of re-export after some processing operations. This is called entrepot trade. Foreign trade basically takes place for mutual satisfaction of wants and utilities of resources.

Three Types of Foreign Trade

Foreign Trade can be divided into following three groups:

1. Entrepot Trade: Entrepot trade can be named as Re-export. It mentions the acquisition of goods from one state and then selling them to another state after some giving out processes.

2. Export Trade: Export trade is related to the sale of goods by one nation state to another nation state or outflow of goods from home country to foreign country.

3. Import Trade: Import trade can be defined as the procurement of goods by one state from another state or inflow of goods and services from distant country to home country.

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