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Economics · Class 12 Commerce

Ch 9Foreign Trade — Class 12 Economics, concept-first.

Foreign trade refers to the exchange of goods and services across the borders of a country — a nation exporting what it produces in surplus or produces efficiently, and importing what it lacks or produces less efficiently.

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Key concepts

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Balance of Trade vs Balance of Payments

The Balance of Trade covers only visible merchandise exports and imports; the Balance of Payments is the broader record of all economic transactions with the rest of the world, comprising the current account (goods, serv…

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Chapter contents

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1

Meaning and Importance of Foreign Trade

Foreign trade refers to the exchange of goods and services across the borders of a country — a nation exporting what it produces in surplus or produces efficiently, and importing what it lacks or prod…

2

Composition of India's Foreign Trade

The composition of trade refers to what a country exports and imports — the commodity-wise break-up of its trade.

3

Direction of India's Foreign Trade

The direction of trade refers to with which countries or regions a country trades — its major partners for exports and imports.

4

Balance of Trade and Balance of Payments

Balance of Trade (BoT) is the difference between the value of a country's visible exports () and visible imports () of goods over a period (usually a year):

5

Export-Import (EXIM) Policy

India's Foreign Trade Policy (FTP) — earlier called the Export-Import (EXIM) Policy — is the set of guidelines and instructions framed by the Government of India (Ministry of Commerce and Industry, th…

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World Trade Organisation (WTO)

The World Trade Organisation (WTO) is the principal international organisation dealing with the rules of trade between nations.

Exercises

+Show 7 questions7 questions
  1. Q4Distinguish between Balance of Trade and Balance of Payments.Free
  2. Q5Explain the composition of India's foreign trade, highlighting the major changes over time.Free
  3. Q6Describe the direction of India's foreign trade and the major trends observed in recent decades.Free
  4. Q7Explain the main objectives and instruments of India's Foreign Trade (Export-Import) Policy.Preview
  5. Q9Discuss the main objectives and functions of the World Trade Organisation (WTO).Preview
  6. Q10Explain the importance of foreign trade for a country like India.Preview
  7. Q12Discuss the causes of a trade deficit in a country like India and suggest measures to correct it.Preview

Sample & Board Papers

Sample papers and previous-year board questions for this subject.

+Show 24 questions24 questions
  1. Q1Which factor of production is most mobile in international trade?Preview
  2. Q2What is Special Economic Zone?Preview
  3. Q3Distinguish between Balance of trade and Balance of payment.Preview
  4. Q4Write a short note on exchange rate.Preview
  5. Q5Explain the difference between internal and international trade. OR What are the reasons for emergence of international trade.Preview
  6. Q6In today's time which factor of production is the most mobile in international trade? (a) (A) Capital (b) (B) Labour (c) (C) Entrepreneurshi…Preview
  7. Q7A balance of payments has how many accounts? (a) (A) 2 (b) (B) 3 (c) (C) 4 (d) (D) 5Preview
  8. Q8What is meant by direction of international trade?Preview
  9. Q9Give the difference between balance of trade and balance of payments. (Any two points)Preview
  10. Q10What is special economic zone?Preview
  11. Q11Explain any three reasons for international trade.Preview
  12. Q12Explain any six points of difference between internal trade and international trade.Preview
  13. Q13What is balance of trade? (a) Balance of current account (b) Balance of capital account (c) Balance of visible trade (d) Balance of invisibl…Preview
  14. Q14A balance of payment has how many accounts? (a) 2 (b) 3 (c) 4 (d) 5Preview
  15. Q15What is meant by direction of international trade?Preview
  16. Q16Give the meaning of balance of trade and balance of payment.Preview
  17. Q17Explain any two points of difference between domestic trade and international trade.Preview
  18. Q18Explain reasons of Foreign trade. [Any 3]Preview
  19. Q19In today's time which factor of production is the most mobile in international trade? (a) Land (b) Capital (c) Labour (d) EntrepreneurshipPreview
  20. Q20Which countries can be included in the list of India's traditional trade partners? (a) England and Russia (b) Japan and China (c) Countries…Preview
  21. Q21What is meant by balanced Balance of Payment?Preview
  22. Q22Explain the difference between internal trade and international trade.Preview
  23. Q23Give the meaning of balance of payment, explain the accounts involved in balance of payment.Preview
  24. Q24Explain the special economic zone (SEZ).Preview

More questions

5 Q
+Show 2 questions2 questions
  1. Q1Balance of Trade refers to the difference between: (a) total imports and total exports of goods and services (b) the value of visible export…Free
  2. Q8The World Trade Organisation (WTO) was established in the year: (a) 1948 (b) 1991 (c) 1995 (d) 2001Preview
+Show 3 questions3 questions
  1. Example 2In a given year, a country's visible exports were ₹8,00,000 crore and its visible imports were ₹11,50,000 crore. Calculate the Balance of Tr…Free
  2. Example 3Using the following illustrative data, calculate a country's Current Account Balance: Visible exports (X): ₹8,00,000 crore Visible imports (…Preview
  3. Example 11A country's total exports were ₹6,40,000 crore in Year 1 and ₹7,36,000 crore in Year 2. Calculate the percentage growth in exports from Year…Preview