Importing and Exporting: The Roots of the Economy

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:

• One-time import

• Recurring import

• Voter file import

• Ballot import

The types of exporting are listed below:

• Direct export

• Indirect export

• Merchant export

• Deemed export

• Penultimate sale

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

Case Study

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:

• Export Invoice

• Packaging List

• Certificate of origin

• Certificate of inspection

Conclusion

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.