3. Liflines of National Economy
The exchange of goods and services among people states and countries is reffered as trade.
It is the place where exchange of goods take place.
International Trade :
Trade between two countries is called international trade. Trade take place through sea, air or land.
Importance of Trade :
1. No country can survive without international trade because resources are space bound.
2. Advancement of international trade of a country leads to its economic prosperity.
3. We earn much of our foreign exchange which is required for importing many essential goods.
4. Exports and imports are the two compounds of trade.
Balance of Triade : The difference between exports & imports is known as balance of trade.
Favourable balance of trade :
If the value of exports of any country is more than the value of imports. It is called a favourable balance of trade.
Unfavorable balance of trade :
The value of imports is more than the value of exports, it is called an unfavorable balance of trade.
India has trade relations with all the trading blocks of the world most of the commodities exported from India consists of both row material and manufactured goods which fetches less income. commodities imported are mostly petroleum, gold, chemicals etc, which the mostly costly. Thus the overall balance of trade is unfavorable.