What are Exports and Imports?
Import and export trade is an example of foreign trade. Some countries might be surplus in few resources while others might be in a deficit, so in order to fulfil the necessities of resources, the goods are imported if the country is deficient in such resources, and when the goods are in surplus, then goods are exported.
Types of Importing and Exporting
The importing types are listed below:
Voter file import
The types of exporting are listed below:
Export and Import Trade
Import means bringing goods from outside India or goods brought from foreign territory to Indian territory for monetary consideration in foreign currency in order to meet the demands of the people. There can be the import of goods as well as the import of services. The imported goods will be covered under the customs act, and customs duty will be levied on them. In case services are imported, they will be covered under the GST act, and IGST will be levied on them.
In the case of exports of goods, the goods are sold from India to a place outside India. Normally exports of goods are duty-free, but in some cases, it is levied at negligible rates. Moreover, the input tax credit is refundable in the export of goods under the GST tax regime.
The evolution of exports can be traced back to the era of the 18th century when the economies started shifting to liberalisation. The father of Economics, i.e., Adam Smith, wrote in his book “The Wealth of the Nation” in 1776 that he brought international trade into the picture.
Advantages of Import and Export
The balance of payments is established through export and import by regulating the balance between Indian and foreign currencies.
It provides a huge scope of growth for the entrepreneur across the global markets.
The government provides tax benefits through rebates or other promotional schemes from time to time.
It reduces the cost of the product by acquiring raw material or finished goods at a cheaper rate.
Due to liberalisation, the trade barriers have been removed and hence, it is very easy to import and export nowadays.
The investment amount is very less as there is no need to set up business in each and every geographical area.
Difference between Import and Export
PQR Ltd wants to export the goods to China but it has no idea about the documents required in case of goods for exports. So, as a student of business studies, you are required to draft a list of documents required for the export of such goods.
Ans: The documents required for the export of goods are as follows:
Certificate of origin
Certificate of inspection
Due to the fast spread of the internet across the globe, the import and export procedures have become more simplified than before. Now, the order can be placed with one click and customers can be served at their doorstep. It has not only enhanced the ease of doing business rather it added several advantages to the consumers as well. The world has now become a global village due to the fast spread of the internet.
FAQs on Importing and Exporting - Roots of The Economy
1. Name the major foreign trade promotion and major schemes.
The major foreign trade promotion and major schemes are as follows:
Duty drawback scheme
Bond scheme for export manufacturing scheme
Exemption in payment of taxes
Advance licence scheme
Export promotion capital goods scheme (EPCG)
Exportation of services
Export processing zones
Export oriented units (100% EOUs)
Export house, trading house, and superstar house for recognising export firms
These are the few schemes available for export promotion. These schemes may vary from business to business. Moreover, these schemes are amended by the government on a regular basis in order to develop a sustainable market in the global economy.
2. Name the major documents used in the import transactions.
Import order or indent
Letter of credit
Bill of lading
Bill of entry
Bill of exchange
Import general manifest
These documents play a major role in import procedures. Import in India is regulated by the Central board of excise and Customs under the Ministry of Finance. The rate of basic customs duty of import of goods is given under schedule first of customs tariff act 1975.
3. What is the link between export and import and the balance of trade?
The balance of trade refers to the difference between export and import. If exports are greater than imports, then the trade component of GDP is positive and adds to the GDP which leads to growth in the economy. It is known as the trade surplus. Here, GDP stands for Gross Domestic Product. If imports are greater than exports, then the trade component of GDP is negative and it reduces GDP which leads to declination in the economy. It is known as the trade deficit.