Question.
How do nations gain from International Trade?
(Class 12 geography, Fundamentals of Human Geography, Chapter 9. International Trade )
Answer.
International trade involves the exchange of goods and services between countries around the world. International trade is mutually beneficial between countries in the following ways:
Promotes regional expertise.
Helps in maintaining a high level of production.
Raises the standard of living of the people.
Availability of goods and services around the world.
Helps in the equalization of prices and wages.
Helps in the dissemination of knowledge, technology, and culture.
Regional Expertise:
Regional specialization means that a particular region is known for the excellence of particular goods and services and international trade allows for regional expertise as it provides a global market for the same. For example,
North Africa is known for the best quality of leather work and international trade provides a global market for leather products.
India is known for proving the best IT services to the world and international trade facilitates the same things.
High level of production:
Special industries are set up to provide goods not only to that area but also to other areas. International trade facilitates industries to create higher levels of output by providing access to global sources for raw materials as well as global markets for manufactured goods.
Raising the standard of living of the people:
After India's 1991 LPG (Liberalisation, Privatization, and Globalisation) reforms, foreign trade in India increased; As a result, it has increased the job opportunities in India which helps in raising the standard of living of the people.
International trade allows countries and firms to access goods and services that are not available domestically or that the commodity is available but is available at a higher cost. International trade helps industries to increase production and also helps industries to reduce the cost of production.
International trade increases competition among countries and this helps firms to bring efficiency in production.
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