1. Introduction to Foreign Trade
Chapter 1.1
Introduction to Foreign Trade

2. Aim
To equip the students on the basics of foreign trade and the history, state and direction of foreign trade in India

3. Instructional Objectives
After completing this chapter, you should be able to:
Explain the concept of Foreign Trade
Discuss International Business and Foreign Trade
Explain India’s Foreign Trade

4. Concept of Foreign Trade

5. Introduction to Foreign Trade Trade is the lifeline of a nation.
Carried out by individuals, a group of people, companies and by the Government
It comprises of the exchange of: goods, resources and services across international borders.

6. Need for Foreign Trade Importance of Foreign trade
It facilitates the even distribution of resources and human capital.
It increases the skills and knowledge level of the people.
It paves for economic development and helps in acquiring capital goods and natural/economic resources at better prices.
Importance of
Foreign trade
A nation can attract foreign direct investment through the means of trade, by showcasing itself as a ‘favorable economy’ for doing business in the world.

7. Importance of Foreign Trade
Manage natural and economic resources
Attract foreign investment
Increases the nation's goodwill
Acquire vital resources in times
of emergency
Creates new jobs
Importance of Foreign Trade:
Foreign trade is an important economic activity for any country because, it creates new jobs and helps a country in managing its natural and economic resources. Trade increases the nation's goodwill in the world and can help it in attracting foreign investment. By trade, a nation can acquire vital resources in times of emergency.

8. Three categories of Foreign Trade
Import
Export
Entrepot
Purchase
Sell
Purchase & Resell
Three categories of Foreign Trade:
Import: It is the economic activity of purchasing goods, services, resources and information from another country, in exchange for money or with other goods/resources of similar value. Ex: India buys oil from Saudi Arabia.
Export: In export, countries sell or barter goods, services, resources and information to other countries in exchange for money or with other resources. Ex: India sells mica to the United States of America.
Entrepot: In this activity, a country buys goods, services, resources and information from another country, and sells a portion of its purchases to a third country. Ex: India imports oil from Kuwait and exports a portion of it to Nepal.

9. Quiz / Assessment
____________ increases the nation's goodwill in the world and can help it in attracting foreign investment.
Trade
Purchase
Inter state
Sell
Correct answer is : a) Trade

10. Quiz / Assessment What is the need for foreign trade?
Economic Development
Non standard of living
Increases investments
Non division of labour
Correct answer is: a) Economic Development

11. Quiz / Assessment
3) In ___________ activity, a country buys goods, services, resources and information from another country, and sells a portion of its purchases to a third country.
Entrepot
Import
Export
Purchase
Correct answer is: a) Entrepot

12. Activity Choose any one country and research India’s trade
Online Activity (60 min)
Choose any one country and research India’s trade
relations with that country in the following areas:
Export Import
Financial Investments
Cultural exchange
Prepare a 2-3 slides presentation on this topic.
Online Activity (60 min
Description:
Choose any one country and research India’s trade relations with that country in the following areas:
Export Import
Financial Investments
Cultural exchange
Prepare a 2-3 slides presentation on this topic.

13. Summary
Foreign trade is an exchange of capital, goods and services across international borders.
Foreign trade is an important because-
It creates new jobs, manages natural and economic resources, increases the nation's goodwill in the world, attracts foreign investment.
Import, Export and Entrepot are three categories of Foreign Trade.
International Business includes business transactions conducted all over the world. It includes the transfer of goods, services, capital, technology and skills.
The government of India is taking various steps to revive India’s foreign trade by increasing the competitiveness of Indian industry, opened up various sectors for foreign direct investment (FDI).

14. e-References
Top India Exports. (2016). Worldsrichestcountries.com. Retrieved 7 July 2016, from
India Imports | | Data | Chart | Calendar | Forecast | News. (2016). Tradingeconomics.com. Retrieved 7 July 2016, from
TRADING ECONOMICS | INDICATORS FROM 196 COUNTRIES. (2016). Cdn.tradingeconomics.com. Retrieved 7 July 2016, from

15. External Resources
Raj, Agarwal. (2005). International Trade Excel Books. New Delhi.
Chruliam Francis. (2008). International trade and export management. 8th Edition. Himalaya Publishing House. Mumbai.
Berg Hendrik Van den & Lwerer J Joshua. (2007). International trade and economic growth. Printice Hall of India.
Nayar Deepak. (1976). India’s Export and Export Policies in the 1960s. Cambridge University Press.
Singh Ram. (2009). International trade operations, Excel Books, 1st Edition. New Delhi.