foreign trade as an engine of economic growth

foreign trade as an engine of economic growth

• 1.
  FOREIGN TRADE ISAN “ENGINE” OF ECONOMIC GROWTH
• 2.
  Foreign Trade Foreign tradeis the process of focusing on the resources of the globe and objectives of the organisations on global business opportunities and threats in order to produce, buy, sell or exchange of goods/services world-wide. Foreign trade is all commercial transactions (private and governmental, sales, investments, logistics, an d transportation) that take place between two or more regions, countries and nations beyond their political boundary.
• 3.
  Economic Growth Economic growthis the increase in the amount of the goods and services produced by an economy over time.  It is conventionally measured as the percent rate of increase in real gross domestic product, or real GDP.  “Economic growth” typically refers to growth of potential output.
• 4.
  Foreign trade asan ENGINE of economic growth International trade Posing challenges Development to meet them Innovation and creation to meet the competition Specialisation and division of labour Enhancement of productivity More income Economic growth
• 5.
  Foreign trade asan ENGINE of economic growth Foreign trade the market for a country’s output. Exports lead to increase enlarges in national output and become an engine of growth.  Increased exports lead to greater utilization of existing capacities, reduce costs which may lead to a further increase in exports.  Expanding exports provide greater employment opportunities.  Increased foreign demand lead to large production and economies of scale with lower unit costs.
• 6.
  Foreign trade asan ENGINE of economic growth  Opens up the opportunities of global market to the entrepreneurs of the developing nations.  Makes the latest technology readily available to the businesses operating in these countries, resulting in increased competition both in the domestic and global fronts.  To compete with their global counterparts, the domestic entrepreneurs try to be more efficient and this in turn ensures efficient utilization of available resources.
• 7.
  Foreign rade asan ENGINE of economic growth in India. The opening of Suez Canal in 1869 led to a reduction of distance between India and Europe which led to an increase in the demand for India’s commercial crops. As a result, production and exports of commercial crops increased. The rise in the output of such agricultural crops as oilseeds, cotton, jute and tea was largely due to a flourishing export trade. Many export processing zones and special economic zones have been established to facilitate manufacture or reprocessing for export. All such efforts create a lot of employment opportunities and lead to an increase in incomes which lead to the demand for many new products which are very often manufactured in the country itself.
• 8.
  Conclusion Here I wouldlike to conclude by saying that foreign trade is an ‘engine’ of economic growth. Specialisation , division of labour, enhancement of productivity, posing challenges, development to meet them, innovation and creation to meet the competition lead to overall Economic growth of World as a whole.
• 9.
  Bibliography  www.wikipedia.com  www.ask.com www.slideshare.com  International Business – P. Subba Rao
• 10.
  THANK YOU