Basis of international trade
Topic: International Trade: Patterns, Ports and the WTO · NCERT: Class 12, Ch 8 "International Trade"
Meaning
The bases of international trade are the reasons why countries trade with each other. NCERT lists five:
- Difference in national resources: geology, relief, soil and climate differ from place to place.
- Population factors: the size, spread and culture of people, and how well off they are.
- Stage of economic development: farming countries and industrial countries trade different goods.
- Foreign investment: foreign money builds mines, oil wells and plantations.
- Transport: better transport lets goods travel farther.
Together they explain what each country sells and buys. The list underplays today's trade in services.
Example
India imports oil from the Gulf countries because the Gulf has rich oil deposits and India does not have enough. That is a difference in national resources. Tankers make the trade possible, which is transport.
Related concepts
- Difference in national resources
- Population factors in trade
- Stage of economic development and trade
- Foreign investment and trade