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International Business Environment

International Trading Environment

Amongst the various forms of trade the international trade is most wide inter-regional trade is trade between different regions with is the some country where as international trade is between different countries. According to Ohin– “International trade is but a special case of inter-local or inters trade. The exports and imports of goods and service are international trade. For example, India export rise, sugar, readymade garments to other countries and imports capital goods from America. It is international trade So, international trade is the performance of business activities designed to plan price, promote and direct the flow of a business activities designed to plan price, promote and direct the flow of a company’s goods and service to consumers and users in more than one nation for a profit.”

Need of International Trading /Business Environment

  1. Necessary for competition-

    Economic recognizes pure competition. But pure competition is practically non-existent in the real world. Pure or perfect competition is the ideal system of them market. They purely competitive firm is under compulsion to use the most economical and modern methods of production so that its cost may be brought down to competitive level. The pressure of competition forces the price to the point at which the firm can make can be achieved at the lowest per unit cost in the international trade, competition becomes global and consumes can obtain the goods at the lowest price. The new economic policy of India has promoted completion and reduced the cost of production.

  2. Utilization of natural resources –

    Differences in advantages of trade different countries may arise because of natural causes like geographical and climatic conditions. Thus leads to territorial division of labour and localization of industries. For instance, some countries may have particular mineral resources like coal, iron, are copper etc. other may have land or climate particularly suitable for certain crops. e.g. jute in Bengal, either these advantages cannot be transferred to other countries with some rare materials, e.g. oil in Arab countries, gold in African countries. These scares materials are equitably distributed among the countries of the world through international trade.

  3. Necessary for development of industries –

    Some industries cannot flouriest without international co-operations, without international co-operation. The country needs machinery equipments, Technical knowledge, raw materials etc. The government formulates that type of policies related to foreign trade which reduce international trade obstacles and promote local industries.

  4. Source of wealth-

    Materialism is the main incentive and ideology of the modern word international trade increase wealth. It increases the level of demand which gives space to the business and trade. It increases the job opportunities. Thus international trade increase prosperity level in a country.

  5. Increases in availability of things –

    Now the international trade has facilitated the consumption of those commodities also which cannot be produces by country from the existing resources. International division of labour and international trade which enable every country to specialize and to export hose things which it can produce cheaper in exchange for what others can provide at a lower cost. International trade has facilitated the consumption of specific commodities like life saving medicines, equipments of warfare etc. The policies of liberalization and globalization adopted India have increased the imports of specific commodities.

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