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Overview of International Trade
Flow
• Meaning of Trade
• Types of Trade
• Need of International Trade
• Benefits of International Trade
• Difference between Domestic & International
Trade
• Advantages of International Trade
• Disadvantages of International Trade
• Current International Economic Problems &
Challenges
• Merchandise & Service Trade
Meaning of Trade
• The term trade is a exchange of goods and
services among people.
Trade are of two types:
• Internal Trade: It means transactions taking
place within the geographical boundaries of a
nation or region. It is also known as home
trade.
• External/International/Foreign Trade.
International Trade
• International trade is the exchange of goods
and services among countries across national
boundaries.
• International trade is the buying and selling
goods beyond geographical borders of the
countries.
• It involves transactions between residents of
different countries.
Why International Trade is
required?
• Unequal distribution of natural resources.
• Supply and demand
• Opportunity for growth
• Economies of scale
• Spread of risk
• Spreading R&D cost.
• Export Subsidy
Mercantilism View
Mercantilism is an economic theory and practise
where the government seeks to regulate the
economy and trade in order to promote domestic
industry often at the expense of other countries.
Mercantilism is associated with policies which
restrict imports, increase stocks of gold and
protects domestic industries.
Neomercantilism View
Neomercantilism is a policy regime that
encourages exports, discourages imports,
controls capital movement, and centralizes
currency decisions in the hands of a central
government.
The objective of neo-mercantilist policies is to
increase the level of foreign reserves held by the
government, allowing more effective monetary
policy and fiscal policy.
Importance of International Trade
• Boost Economic Development
• Enhances Competitiveness
• Export Diversification
• Encourages Innovation
• Expand Business Opportunities
• Improvement of Quality
• Maintain good relation between the Nations
Similarities between Domestic and
International Trade
• Profit Motive
• Two Parties
• Sales & Marketing efforts
• Transaction of goods & services
• Common commercial services like banking,
insurance, communication etc.
• Development of social relations.
Dissimilarities between Domestic &
International Trade
• Currency Differences
• Resource Mobility
• Policy Differences
• Geographical and Other Differences
• Trade Restrictions
• Heterogeneous Markets
• Different Political Units
Advantages of IT
• Foreign Exchange Earnings
• Better Utilization of resources
• Improving growth prospects and employee
potential
• Increase standard of living.
• Way out to intense competition in domestic
market.
• Prospects for higher profit for firm.
Disadvantages of International
Trade
• Import of harmful goods.
• Home Industries cannot be prosperous.
• Exhaust resources.
• Lead to war.
• Language barrier.
• Different currency.
• Problem of transport.
Difficulties in International Trade
• Distance
• Different Languages
• Risk
• Lack of information about foreign business
man.
• Problem in payment
• Study of foreign market
• Intense competition
Current International Economic
Problems & Challenges
• Slow growth and High unemployment in
advance economies after the great recession of
2008 and it lead to to over borrowing, budget
deficits and loss of international
competitiveness.
• Trade Protectionism in advanced countries in a
rapidly globalized world.
• Excessive Fluctuations in exchange rates.
• Structural Imbalances in Advanced Economies
(imbalances in the form of excessive spending
and inadequate saving).
• Deep poverty in many developing countries.
• Resource scarcity, environment degradation,
climate change and unsustainable
development.
International Trade
Broadly international trade is classified into two
parts:
• Merchandise Trade
• Service Trade
Major product groups covered
under MEIS
Agricultural products, Fruits, Flowers, vegetables, Tea
Coffee, Spices, Value added and packaged products,
Handicraft, Handloom, Jute products, Textile and
garments, Pharmaceuticals, Surgical, Herbals, Auto
Components, Telecom, Computer, Electrical and
Electronics Products, Transport Equipment, industrial
machinery, Machine tools & parts, two wheelers, bicycles,
ships, chemicals, plastics, rubber, ceramic and glass,
leather garments, footwear, steel furniture, paper,
stationary, iron, steel, and metals products.
India’s Trade Story
Some important Services covered under SEIS are
as follows:
• Legal, Accounting, Architectural, Engineering,
Educational, Hospital services.
• Hotels and restaurants, Travel agencies and
tour operators, other business services.
India’s Trade Story
Foreign Trade Policy 2015-20
In foreign trade policy 2015-20 goods and
services classified into two parts:
• Merchandise Exports from India Scheme
(MEIS)
• Service Exports from India Schemes (SEIS)
Global Merchandise Trade
Global Service Trade
Top 10 Exporter in the World
Top 15 Importers in the World

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Overview of internatioal trade

  • 2. Flow • Meaning of Trade • Types of Trade • Need of International Trade • Benefits of International Trade • Difference between Domestic & International Trade • Advantages of International Trade • Disadvantages of International Trade
  • 3. • Current International Economic Problems & Challenges • Merchandise & Service Trade
  • 4. Meaning of Trade • The term trade is a exchange of goods and services among people. Trade are of two types: • Internal Trade: It means transactions taking place within the geographical boundaries of a nation or region. It is also known as home trade. • External/International/Foreign Trade.
  • 5. International Trade • International trade is the exchange of goods and services among countries across national boundaries. • International trade is the buying and selling goods beyond geographical borders of the countries. • It involves transactions between residents of different countries.
  • 6. Why International Trade is required? • Unequal distribution of natural resources. • Supply and demand • Opportunity for growth • Economies of scale • Spread of risk • Spreading R&D cost. • Export Subsidy
  • 7. Mercantilism View Mercantilism is an economic theory and practise where the government seeks to regulate the economy and trade in order to promote domestic industry often at the expense of other countries. Mercantilism is associated with policies which restrict imports, increase stocks of gold and protects domestic industries.
  • 8. Neomercantilism View Neomercantilism is a policy regime that encourages exports, discourages imports, controls capital movement, and centralizes currency decisions in the hands of a central government. The objective of neo-mercantilist policies is to increase the level of foreign reserves held by the government, allowing more effective monetary policy and fiscal policy.
  • 9. Importance of International Trade • Boost Economic Development • Enhances Competitiveness • Export Diversification • Encourages Innovation • Expand Business Opportunities • Improvement of Quality • Maintain good relation between the Nations
  • 10. Similarities between Domestic and International Trade • Profit Motive • Two Parties • Sales & Marketing efforts • Transaction of goods & services • Common commercial services like banking, insurance, communication etc. • Development of social relations.
  • 11. Dissimilarities between Domestic & International Trade • Currency Differences • Resource Mobility • Policy Differences • Geographical and Other Differences • Trade Restrictions • Heterogeneous Markets • Different Political Units
  • 12. Advantages of IT • Foreign Exchange Earnings • Better Utilization of resources • Improving growth prospects and employee potential • Increase standard of living. • Way out to intense competition in domestic market. • Prospects for higher profit for firm.
  • 13. Disadvantages of International Trade • Import of harmful goods. • Home Industries cannot be prosperous. • Exhaust resources. • Lead to war. • Language barrier. • Different currency. • Problem of transport.
  • 14. Difficulties in International Trade • Distance • Different Languages • Risk • Lack of information about foreign business man. • Problem in payment • Study of foreign market • Intense competition
  • 15. Current International Economic Problems & Challenges • Slow growth and High unemployment in advance economies after the great recession of 2008 and it lead to to over borrowing, budget deficits and loss of international competitiveness. • Trade Protectionism in advanced countries in a rapidly globalized world. • Excessive Fluctuations in exchange rates.
  • 16. • Structural Imbalances in Advanced Economies (imbalances in the form of excessive spending and inadequate saving). • Deep poverty in many developing countries. • Resource scarcity, environment degradation, climate change and unsustainable development.
  • 17. International Trade Broadly international trade is classified into two parts: • Merchandise Trade • Service Trade
  • 18. Major product groups covered under MEIS Agricultural products, Fruits, Flowers, vegetables, Tea Coffee, Spices, Value added and packaged products, Handicraft, Handloom, Jute products, Textile and garments, Pharmaceuticals, Surgical, Herbals, Auto Components, Telecom, Computer, Electrical and Electronics Products, Transport Equipment, industrial machinery, Machine tools & parts, two wheelers, bicycles, ships, chemicals, plastics, rubber, ceramic and glass, leather garments, footwear, steel furniture, paper, stationary, iron, steel, and metals products.
  • 20. Some important Services covered under SEIS are as follows: • Legal, Accounting, Architectural, Engineering, Educational, Hospital services. • Hotels and restaurants, Travel agencies and tour operators, other business services.
  • 22. Foreign Trade Policy 2015-20 In foreign trade policy 2015-20 goods and services classified into two parts: • Merchandise Exports from India Scheme (MEIS) • Service Exports from India Schemes (SEIS)
  • 25. Top 10 Exporter in the World
  • 26. Top 15 Importers in the World