There are a variety of barriers to international trade. Many are man-made to serve economic interests such as protecting the economies of respective countries. Others arise out of various challenges faced by international trade participants.
Man-made barriers to trade can include tariffs & duties, import/ export licenses, quotas, subsidies, voluntary export restraints, embargos, currency devaluation and trade restrictions. These barriers can arise out of a number of circumstances such as trade relations between countries, the need to protect local industries or to discourage or encourage imports or exports to defend a nation’s economy.
When engaging in…
Once a trade transaction is completed, the importer must pay the exporter reliably and on time, with a bank often acting as an intermediary between both parties. Broadly speaking, there are five commonly available methods for efficient international trade settlements.
One of the most secure payment methods for both buyers and sellers, an LC is a letter from a bank that guarantees it will make a payment on behalf of the buyer to the seller, on time and for the stipulated amount, without fail. …
International trade refers to the economic transactions made between countries or economies. Broadly speaking, three types of international trade exist. These are Export Trade, Import Trade and Entrepot Trade.
When one country sells its goods or services to another country, the selling country is engaged in export trade. When a country buys goods or services from another country, it is engaged in import trade. It thus naturally follows that every such trade transaction requires the participation of an exporter and an importer and vice versa.
Both export and import trade can have many advantages for each party. For emerging markets…
Various theories of international trade have emerged and evolved over the years. Understanding them can help us better understand trade patterns and origins. Here are some of the most important theories in international trade.
.One of the oldest theories, mercantilism is an economic policy adopted by countries to maximize exports, while concurrently minimizing imports, thus creating a trade surplus. However, this model advocates for measures such as tariffs, subsidies and even imperialism to achieve this.
Absolute Advantage — Smith Model
.This refers to the model put forward in economist Adam Smith’s work, “The Wealth of Nations”. It revolves around the…
International trade helps developing countries build links with global trade partners, thus gaining many benefits. These include leveraging comparative advantages, economies of scale, improvements in technology, increased employment, better utilization of manufacturing capacities, increased domestic savings and improved potential for foreign direct investment. Overall, international trade has the potential to spur real economic development and improvements to standards of living.
Comparative advantage refers to the idea that if a country is better suited to producing some kind of good or service than its peers, it will produce more of it while consuming less of it, resulting in a surplus that…
India and China have been trading partners for a long period of time
However, the recent border tensions between the two nations cast a major shadow over their trade relations
Despite the recent border tensions between the two countries, India and China continue to be major trading partners China was India’s second-largest trading partner as of 2019, only behind the USA
The country accounts for nearly 13.7% of the total imports into India as of 2019
This blog analyses the key items that India imports from China
India imports several…
In recent years, South Korea has emerged as a major technological hub
Exports are a critical component of the Korean economy. This is because exports account for as much as 50% of the total economy of the country
We deploy the latest technology to ensure uninterrupted payment processing and issuance of trade finance instruments from a single point within a shorter period