Foreign Trade

Foreign trade also called as the International trade is defined as the export and import of the capital, goods and services across the nation. You might have heard about the Export and Import , the foreign trade is all about this Export and Import. The foreign trade has a lot of the significance and this significance can be the followings-

                                                                                                     Vital Features Of Foreign trade

1. Creates Efficiency - The foreign trade creates the efficiency as the international technology and innovative and skilled human resources leads to the efficiency .

2. Promotes peace - The foreign trade helps in promoting the global peace and harmony. As the different countries import and export the different goods and services it later leads to the countries creating an economic and the cultural relationship with each other .

3. Increases the GDP- As due the the newest technology and the with the skilled human resources the GDP of the countries increases . The increase in GDP is a very essential economic indicator for accessing a nations economy.

4. Standard of living - The foreign trade enhances the standers of living which includes better medical facilities ,better educational facilities , different kinds of entertainment and most important of all the increase in the hygiene .

5. Alleviates the poverty - As due to increase in The GDP the economic growth takes places and in lieu with it the poverty alleviates.  

                                                                                           Who Regulates The Foreign Trade (Worldwide)

It is important that there should be some intergovernmental organization (arbitration) which must be formed by taking the consensus of all the nations and must act like a facilitators for the foreign trade. The intergovernmental organization which regulates the foreign trade is called as World Trade Organization.

World Trade Organization. (WTO)

Formed in - 1 January 1995

Members - 164 countries. (member states)

Headquarters - Geneva, Switzerland.

The world trade organization is a part of the economic and the social council of the United Nation (UN) . The world trade organization takes account for about 96% of the global trade. The WTO not only acts as a arbitrator when there is a dispute but also it act as a promotor of the global trade without any barriers and restrictions. A free and fair trade practices among the nations is the principle objective of WTO. There is however, a lot of criticism about the WTO first and the foremost being that the liberalized trade doesn’t guarantee the economic grate or alleviation of the poverty. If sole purpose for which the organization was created is not being fulfilled then the mere existence of the organization is just unnecessary and unproductive. The criticism has also been raised while taking the relation the historical data that the economic growth of the developing nations were higher prior to the creation of these intergovernmental organization to promote the foreign trade, with respect to the current times.

                                                                                                     Who regulates the foreign trade (India)

In accordance with the Foreign Exchange Management Act 1999 section 2 Export trade is regulated by the Directorate General of Foreign Trade (DGFT) functioning under the Ministry of Commerce and Industries, Department of Commerce, Government of India. Exporters are required to follow the Notifications/Directions issued by DGFT from time to time.. Department of Commerce is divided into eight divisions and these are as follows -

                                                                                        Department of Commerce is divided into eight divisions

· Administrative and General Division: International trade; Foreign Trade; State trading; Management of Indian Trade Services; Special Economic Zones.

· Finance Division

· Economic Division

· Trade Policy Division

· Foreign Trade Territorial Division

· State Trading & Infrastructure Division

· Supply Division

· Plantation Division

· Trade In India By An NRI

Foreign Trade

Bare Acts

· Foreign Trade (Development & Regulation) Act, 1992

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