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Unit 8: Foreign Trade of India

channelized for the construction of only those properties which would give maximum Notes
returns. Thus there is balanced distribution and utilisation of resources at the international
level due to foreign trade.
3. Equality of Prices: Prices can be stabilised by foreign trade. It supports to keep the request
and supply location stable, which in turn stabilises the prices, making payments for
transport and other marketing expenses.
4. Availability of Multiple Choices: Foreign trade benefits in providing a better choice to the
consumers. It supports in making obtainable new changes to consumers all over the
world.
5. Ensures Quality and Standard Goods: Foreign trade is highly modest. To preserve and
raise the request for goods, the exporting states have to retain the quality of goods. Thus,
quality and standardised goods are produced.

6. Raises Standard of Living of the People: You must keep in mind that imports can enable
standard of living of the people. As people can have a choice of new and better changes of
goods and services. By overriding new and better diversities of goods, people can increase
their standard of living.
7. Generate Employment Opportunities: Foreign trade supports in making employment
chances, by increasing the mobility of labour and resources. It makes direct service in
import sector and indirect employment in other sector of the economy. Such as Industry,
Service Sector (insurance, banking, transport, communication), etc.
8. Facilitate Economic Development: Imports assist in economic development of a nation.
This is because with the import of capital goods and knowledge, a country can make
growth in all sectors of the economy, i.e. agriculture, industry and service sector.
9. Assistance during Natural Calamities: During natural disasters for instance earthquakes,
floods, famines, etc., the exaggerated countries face the problem of scarcity of essential
goods. Foreign trade allows a country to import food grains and medicines from other
countries to support the affected people.
10. Maintains Balance of Payment Position: Every country has to continue its balance of
payment position. Ever since, every country has to import, which marks in discharge of
foreign exchange, it also deals in trade for the inflow of foreign exchange.
11. Brings Reputation and Helps Earn Goodwill: A country which is complicated in spreads
earns kindness in the global market.

Example: Japan has received a lot of goodwill in global markets due to its exports of
feature electronic goods.
12. Promotes World Peace: You must understand that foreign trade takes countries closer. It
enables handover of technology and other assistance from established countries to
emerging countries. It brings various countries faster due to economic relationships arising
out of trade agreements. Thus, foreign trade generates a friendly atmosphere for
sidestepping wars and conflicts. It endorses world peace as such countries attempt to
preserve friendly relationships among themselves.

Did u know? India’s key exports in 2012 were petroleum products which generated $56bn,
followed by gems and jewellery with $47bn. Pharma products, transport equipment,
machinery and readymade garments are also big exports for India.

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