ЁЯМН

International Trade and Its Process

Feb 14, 2025

International Business and Trade

Introduction

  • International trade means trade between two countries.
  • Payment must be made in foreign currency.
  • International business provides employment and increases national income.

Definition of International Business

  • Internal Trade: Business within the country's borders.
  • International Business: Business beyond the country's borders.

Export and Import

  • Export: Selling goods outside the country.
  • Import: Buying goods from another country.
  • Re-Exporting: Processing imported goods and selling them to another country.

Elements of External Trade

  • Involvement of two countries is necessary.
  • Payment in foreign currency.

Reasons for International Business

  • Unequal distribution of natural resources.
  • Availability of different factors in different countries.
  • Difference in labor productivity and production cost.

Advantages of International Business

  • Receipt of foreign exchange.
  • Proper utilization of resources.
  • Increase in employment opportunities.
  • Increase in national income.

Export Procedure

  1. Inquiry: Information about demand from abroad.
  2. Order Processing: Preparation of necessary licenses and details.
  3. Letter of Credit: Guarantee from the bank.
  4. Pre-Shipment Finance: Finance for packing and processing.
  5. Inspection Certificate: Quality assurance.
  6. Shipping: Loading goods and obtaining bill of lading.
  7. Payment Certification: Payment guarantee.

Import Procedure

  1. Trade Inquiry: Searching for foreign goods.
  2. Import License: Obtaining a license in necessary cases.
  3. Preparation of Foreign Exchange: From an authorized bank by RBI.
  4. Placing Order: Ordering from abroad.
  5. Custom Clearance: All necessary documentation.

World Trade Organization (WTO)

  • Sets rules for international trade.
  • 164 member countries.
  • Ensures peace and smooth trade.
  • Resolves disputes.

Conclusion

  • International business aids in economic development at national and international levels.
  • Safe and profitable trade can be ensured by following correct procedures.

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