Subject: Social Studies
The action of buying and selling goods and services is called trade. It involves transfer or exchange of goods for moneyIt is essential fo the satisfaction of human needs/wants.Broadly they are two types of trade are as follows:
Traders buy goods in one part of the country and sell in other places inside Nepal. Fruits vegetables, animals, wood and some manufactured goods such as Coca-Cola and noodles move around like this. This is an internal trade.
Very few countries have everything they need. For example, many countries have no oil. So countries buy goods (import) from other countries and sell other goods (export) to other countries. It is good to sell more than you buy. This is trade surplus. If a country buys more than it sells, it has a trade deficit which means less money for investment and development. The patterns of international trade are very complicated, and an important part of world politics, but many LDC export one or two raw materials ( such as coffee, sugar, cotton), while MDC export more expensive manufactured goods.
Some big countries such as India have tried a policy of being self-sufficient, that is not to trade at all with other countries, but only to use their own natural and human resources, and developing their own industries to supply all their own national needs
Even countries which could be self-sufficient are now entering into world trade. Increasingly all countries are waiting to join in free world trade. So there must be advantages! However, poorer countries with only one or two raw materials to export may be always in danger: too much of their product causes low prices, but the harvest fails there may be insufficient to export, or world demands may change. So there are dangers as well. But let's look at the advantages.
Nepal's international trade is in deficit. The trade is India-centered but the government has started trade diversification by keeping trade relation with other countries. Nepal exports raw materials at a low price and imports manufactured goods at the high price. The main exports of our country are ready-made dresses, carpets, agriculture and forest-related goods. But the international market of many of our exports has declined recently.
Nepal's international trade is not prospering. It has many problems, which are ,
If one country concentrates on a certain product, they can develop skills and knowledge and product very high quality goods by the help of trade.
We can grow indigenous industries to supply consumer goods.
Trade is the practice of buying or selling of goods and services for profit.
The difference between national and international trade are:
|National Trade||International Trade|
|The supply of goods and services within a country is known as National trade.||The buying and selling the goods and services with other countries is known as International trade.|
|National trade doesn't include huge money.||International trade includes lots of money.|
|Fruits, vegetables, animals, woods and some manufactured goods such as Coca-Cola and noodles are some examples.||Coffee, sugar, cotton and expensive goods are some examples.|
Our international trade is India-centric. Most of our imports are done from India. Our economy sustains with Indian help. As Nepal is small and less developed country we don't have much to offer for export. To improve the trade deficit Nepal must improve its output for trading. Better qualitative and expensive products should be encouraged for export. Our trade must diversify. We should trade keeping good relation with other countries.
International trade is important in Nepal for following reasons:
These problems can be solved by implementing following points:
Nepalese trade highly depends on India. Lack of export of primary goods, import of readymade and manufactured goods, imports of luxury goods, high import cost, lack of study and research are some of the characteristics of Nepalese foreign trade.
What do you mean by trade deficit and trade surplus?
If the things to be sold are of higher price than the things to be bought, it is considered as a trade surplus and if the things to be sold are lower price than the things to be brought, it is considered as trade deficit.
When the total import of the country is equal to the total export or the export is more than import there is no adverse fluctuation in the national economy and this stage is considered as balance of trade. For example, if Nepal had imports worth Rs 10,000,000,000 in 1995 A.D. and the exports worth 10,000,000,000 then it would be considered as balance of trade in Nepal in 1995 A.D.
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