Counter trade means exchanging goods or services which are paid for, in whole or part, with other goods or services, rather than with money.It has various type like barter trade, counter purchase etc

2. Countertrade
Presented By:-
shilpa singal

3.  Counter trade means exchanging
goods or services which are paid for,
in whole or part, with other goods or
services, rather than with money.

4. variants of counter trade
Barter: Exchange of goods or services directly for
other goods or services without the use of money as
means of purchase or payment.

5. Example of Barter Trade :
Country B Country A
Cigars Mining Equipment
This means if Country A sells mining equipment to Country B in
return for cigars - they will probably hold some of the mining
equipment back until they have made some good profit.

6. Switch trading: Practice in which one company sells to another its
obligation to make a purchase in a given country.
Example- Switch Trading :
•Country C purchase goods from country B and sell its to country A.
Because country A and B have no relation they do not know each other
and country C and B have good relation and country C and A also have
good relation.

7. Counter purchase: Sale of goods and services to a
country by a company that promises to make a future
purchase of a specific product from the country.
Buyback: occurs when a firm builds a plant in a country -
or supplies technology, equipment, training, or other
services to the country and agrees to take a certain
percentage of the plant's output as partial payment for the
contract.

8. Why do we counter
trade:- Expand or maintain foreign markets.
 Increase sales.
 Repatriate blocked funds.
 Clean up bad debt situations.
 Build customer relationships.
 Keep from losing markets to competitors.
 Gain foreign contracts for future sales.
 Find lower-cost purchasing sources.

9. Advantages of Counter
trade:-
 Allows entry into difficult markets.
 Increases company sales.
 Increases sales volume.
 Overcomes credit difficulties.
 Allows fuller use of capacity.
 Allows disposal of declining products.
 Provides sources of attractive inputs.
 Gain competitive edge over competition.

10. Disadvantages of Countertrade
 Time consuming and complex negotiations.
 Uncertainty.
 Increase costs.
 Brokerage costs.
 Getting businesses in which firm may have no
knowledge.

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