Q.What is International Trade ? Various types of International Trade.

International (foreign) trade is the buying and selling of goods and services between different countries. Its three types are import trade (purchasing from foreign countries), export trade (selling to foreign countries) and entrepot or re-export trade (importing goods for the purpose of re-exporting them to a third country). ## Meaning of International Trade International trade, also called foreign trade or external trade, refers to the exchange of goods and services between two or more countries across national frontiers. It arises because no country is self-sufficient — each has different natural resources, climate, skills and costs of production — so countries buy what they cannot produce cheaply and sell what they produce in surplus. It involves dealing in foreign currencies, customs formalities and documents such as the bill of lading and letter of credit. ## Types of International Trade 1. Import Trade — Buying goods and services from other countries for use in the home country, for example India importing crude oil or machinery. 2. Export Trade — Selling goods and services produced in the home country to other countries, for example India exporting tea, software or cotton textiles. 3. Entrepot Trade (Re-export Trade) — Importing goods from one country for the purpose of re-exporting them to another country, often after some processing, grading or packing; the goods are not meant for home consumption. International trade helps countries use thei …