Importance of foreign trade.
In the early stage of human civilization, men produced as per their need and consumption. But the industrial development has made production round about and this has resulted in large scale production. This is turn necessitates and foreign trade which helps in the distribution of surplus produced. The primary objective of foreign trade is to increase production and raise the standard of living of its people. There is a growing need for foreign trade because of the following reasons.
Image Source: stateschronicle.com/wp-content/uploads/2014/08/UK-Trade-Deficit.jpg
- It leads to effective and better utilization of natural resources.
- The uneven distribution of natural resources has resulted foreign trade.
- It develops a wide range of market for the products.
- It is regarded as a boon to meet natural calamities like flood, drought.
- It contributes a great deal of well being of the people involved in foreign trade.