problems of India's foreign trade

2.  What is export
 Export trends
 Major problems
 Description of problems
 Aids to problem of foreign trade

3.  Export means the transferring of any good from one
country to another country in a legal way for the
purpose of trade. Export goods are provided to the
foreign consumers by the domestic producers.

4.  If the Indian economy grows at the same pace,
India would most definitely export goods worth
by and may supersede the
exports of other large developing countries like
Brazil.

5.  Language Difference
 More Risk
 Government Control
 Difference in laws
 Difficulty in payment
 Custom Duty
 Lack of information
 Evil Effects of foreign Trade
 Economic Dependence
 Disadvantages to Agricultural Countries
 International Jealousy
 One- sided development of the country
 Dumping

6.  Language Difference:- Each country has
its own language. When a trader of one
country deals with trader of another country
then because of different languages, it
becomes difficult.
o More Risk:- the quantum of risk is higher in
foreign trade than that in internal business. In
foreign trade, goods are transported from
quite long distances and usually through sea
ways. Rocks, waves and climate in sea can
damage the goods to a great extent. While in
transit, enemy countries can also attack.

7.  Government Control:- international
business is usually done under
government control. For import & export
of products, various licenses are taken
and various information are to be
submitted. Moreover, the whole
procedure is quite complex.
o Difference in laws:- the rules related to export-
import are separate in each country. Due to the
difference of rules in each country, there is always
some doubt in the mind of trader regarding payment
and other terms of business.

8.  Custom duty:- to control the export- import
of country, the government uses custom
duty. The objective of tax on import is to
increase the price of foreign goods so that
it becomes unattractive for domestic
consumers. The objective of tax is to
reduce the flow of foreign goods.
o Difficulty in payment:- each country has
different currency. So, businessmen face a
lot of problems while paying or receiving
money.

9.  Lack of information:- It is difficult to find out the
details of financial position and business of any
businessman sitting at distant places. Such
information can be taken from banks, information
agencies, chamber of commerce, etc.
 Evil effects of foreign trade:- the advanced
countries of the world are benefitted through
international trade, while developing and
underdeveloped are hit hard. These countries are
unable to produce at that pace as, they should be
producing.

10.  Economic Dependence:- if a country depends upon other country
for raw materials and if due to war or some other reasons imports are
stopped, the whole economic life of that country will be paralyzed.
Sometimes economic crisis of one country spreaded all over the
world.
o Disadvantages to Agricultural countries:-
the law of “increasing returns” applies in
industries, while the law of “diminishing returns”
applies in agriculture. It is clear that the
quantum of importing of manufactured goods is
more than the exporting of agricultural goods.

11.  International Jealousy:- the biggest problem in
the international trade is the jealousy between the
trading companies. The developed countries
always exploit the weaker nations and ultimately
they have to bow down before their trading terms
and conditions.
 One-sided development of the country:- the
international trade is conducted on the basis of
geographical division of labours and specialization.
Therefore, it does not provide the chance to
develop each and every country. Thus, the
development of the country becomes one- sided
rather than multi-sided.

12.  Dumping:- according to this policy, the advanced
countries export their goods at the rates even below
the cost of production. Japan adopted this policy
during the pre-second world war and put Indian
Textile industry under great loss.

13.  Other problems:-
o Affected by weather & climate
o Low labour productivity
o Less technology
o Patent (high payment of royalty)
o Lazyness

14.  Trader should know various
languages
 To protect from risk marine
insurance is a powerful tool
 Businessmen should have the
knowledge of changes in exchange
rates
 Modernization
 Adopt modern technology in
agriculture
 Standardization of products and
process

15. PRESENTED BY:
KRUTI PATEL