External Trade:
"External trade also called as foreign trade. It refers to buying and selling between two or more countries."
For instance, If Mr.X who is a trader from Mumbai sells his
goods to Mr.Y another trader from New York then this is an example of foreign
trade.
External
trade can be further sub-divided into three groups, viz.
Export Trade:
When a trader from home country sells his goods to a trader located in
another country, it is called export trade. For e.g. a trader from India sells
his goods to a trader located in China.
Import Trade:
When a trader in home country obtains or purchase goods from a trader
located in another country, it is called import trade. For e.g. a trader from
India purchase goods from a trader located in China.
Entrepot Trade :
When goods are imported from one country and then re-exported after
doing some processing, it is called entrepot trade. In brief, it can be also
called as re-export of processed imported goods. For e.g. an Indian trader
(from India) purchase some raw material or spare parts from a Japanese trader
(from Japan), then assembles it i.e. convert into finished goods and then
re-export to an American trader (in U.S.A).
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