In our daily lives, we use a variety of goods and services. Some of these are readily available in our immediate surroundings, while others necessitate the transport of items from other locations. Goods and services do not automatically migrate from supply-to-demand locations.
Transportation is required to convey these products and services from their supply sites to demand areas. Some people are helping to make these movements happen. These are known as traders who arrange for things to be transported to consumers.
As a result, a country’s rate of growth is determined by the creation of commodities and services as well as their movement across space. As a result, efficient modes of transportation are required for rapid development.
Trade is the exchange of goods between individuals, states, and countries. International trade refers to trading between two countries that takes place by water, air, or land. Local trade takes place in cities, towns, and villages, while state trade occurs between two or more states.
Without international trade, no country can live. It is made up of two parts: export and import. The difference between a country’s export and import is its trade balance. It is favourable when exports exceed imports; otherwise, it is unfavourable. India has trade links with all of the main trading blocs as well as all of the world’s geographical areas. Gems and jewellery, chemicals and associated products, agriculture and allied products, and other items are among the items exported from India to other countries.
Petroleum crude and products, gems and jewellery, chemicals and associated products, basic metals, electrical items, machinery, agriculture, and allied products are among the commodities imported into India. India has risen to prominence as a global software powerhouse, generating significant foreign exchange through information technology exports.
Outcomes of international trade
- International trade between two or more countries assists all of them in making the most use of their natural resources. Every country can concentrate on producing goods and services from these resources and selling them to other countries in order to gain foreign cash and strengthen their economy.
- It enables a country to receive commodities and services that it would be unable to produce on its own due to a lack of resources or greater production costs. They may obtain these things at a reduced cost from outside the country.
- Some countries have advantages such as natural resources, labour, technology, and capital. These resources enable them to produce specific types of goods and services at lower costs and sell them to other countries that require them.
- It aids in smoothing out the advantages and putting a halt to the wild oscillations that can occur as a result of these items’ unavailability.
Aspect of Globalization
- Globalization leads to more trade and a higher standard of living. It increases competition in the domestic product, capital, and labour markets, as well as between countries with differing trade and investment strategies.
- Transnational corporations that invest in establishing plants in other nations give jobs to individuals in those countries, frequently lifting them out of poverty.
- Globalization has promoted cross-cultural understanding and sharing by lowering cross-border distances. A worldwide society that is neutral increases the rate at which people are exposed to the culture, attitudes, and values of people from different countries.
- It also gives poor countries the opportunity to thrive economically and spread prosperity through injections of international finance and technology.
Foreign Trade Policy (FTP) of India
FTP lays out the government’s plans to boost local production and exports in order to spur economic growth. The Directorate General of Foreign Trade, which is part of the Ministry of Commerce and Industry, is in charge of promoting and facilitating exports and imports.
The Department of Commerce is responsible for making India a major player in global trade and establishing leadership roles in international trade organizations to match the country’s growing importance. The Department produces commodity and country-specific strategies in the medium term, and a strategic plan/vision and India’s Foreign Trade Policy in the long term.
Furthermore, India’s Foreign Trade Policy involves aiding exporters in maximizing GST benefits, closely monitoring export performance, improving cross-border trading ease, increasing revenue from agriculture-based exports, and promoting exports from MSMEs and labour-intensive businesses. State export partners have also been a priority for the Department of Commerce. As a result, state governments are developing export strategies based on the strengths of their specific industries.
India is a signatory to the World Trade Organization’s (WTO) Trade Facilitation Agreement (TFA), which aims to make transactions easier and cheaper. According to current WTO standards and those under consideration, India must gradually phase down subsidies and move toward fundamental systemic reforms.
RCEP and India
15 nations, led by China, Japan, South Korea, Australia, New Zealand, and the 10-member ASEAN grouping, inked the Regional Comprehensive Economic Partnership (RCEP), forming one of the world’s largest trading blocs. India had been a party to the talks for over nine years before withdrawing in November 2019, claiming that poor protections and cheaper customs tariffs will harm its industrial, agriculture, and dairy industries. However, by remaining outside, India has cut itself off from a trade bloc that accounts for 30% of the global GDP and 2.2 billion people.