Q.What is International Trade ? Explain various types of International Trade.

International trade is the exchange of goods and services between countries, i.e. trade that crosses national boundaries. It arises because countries differ in natural resources, climate and skills. It is classified into three types — import trade, export trade and entrepot (re-export) trade. ## Meaning of International Trade International (or foreign) trade is the trade of goods and services carried on between two or more countries. When a buyer in one country purchases from, or a seller in one country sells to, a party in another country, international trade takes place. It arises because no country is self-sufficient — differences in natural resources, climate, technology and labour make each country produce some goods more cheaply than others, and trade lets each gain from this. It is studied in the AP Intermediate 2nd-year Commerce International Trade chapter (whose coverage aligns with the NCERT/CBSE commerce curriculum). ## Types of International Trade 1. Import Trade — It means buying goods and services from a foreign country for use or sale in the home country. For example, India importing crude oil or machinery. It is needed when goods are not produced at home or are cheaper abroad. 2. Export Trade — It means selling goods and services produced in the home country to buyers in a foreign country. For example, India exporting tea, software or cotton textiles. Exports earn foreign exchange for the country. 3. Entrepot Trade (Re-export Trade) — It means importing goods from one country and then exporting them to another country, with or without some processing, instead of consuming them at home. The country acts as a trading intermediary. For example, goods imported into India and then re-exported to a neighbouring country. Thus international trade, through these three forms, lets countries obtain wh …