27 Apr 2020

What is meant by exports?

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Introduction Exports are the goods and services produced in one country and purchased by residents of another country. It doesn’t matter what the good or service is. It doesn’t matter how it is sent. It can be shipped, sent by email, or carried in personal luggage on a plane. If it is produced domestically and sold to someone in a foreign country, it is an export. Exports are one component of international trade. The other component is imports. They are the goods and services bought by a country’s residents that are produced in a foreign country. Combined, they make up a country’s trade balance. When the country exports more than it imports, it has a trade surplus. When it imports more than it exports, it has a trade deficit. In very simple terms, export may be defined as the selling of goods to a foreign country. However, As per Section 2 (e) of the India Foreign Trade (Development & Regulations) Act (1992), the term export may be defined as ‘an act of taking out of India any goods by land, sea or air and with proper transaction of money”. Exports and Imports shall be ‘Free’ except when regulated by way of ‘prohibition’, ‘restriction’ or ‘exclusive trading through State Trading Enterprises (STEs)’ as laid down in Indian Trade Classification (Harmonized System) [ITC (HS)] of Exports and Imports. The list of ‘Prohibited’, ‘Restricted’, and STE items can be viewed by clicking on ‘Downloads’ at http://dgft.gov.in Three Ways Countries Boost Exports Countries use trade protectionism to give their industries an advantage. This usually consists of tariffs that raise the prices of imports. They also provide subsidies on their own industries to lower prices. But once they start doing this, other countries retaliate with the same measures. These trade wars lower international commerce for everyone. The World Trade Organization tried to negotiate a multilateral agreement between its 149 members. The so-called Doha agreement almost succeeded. But the European Union and the United States refused to eliminate their farm subsidies. Countries also increase exports by negotiating trade agreements. They boost exports by reducing trade protectionism. Most countries relied on bilateral agreements or regional trade agreements for years. But in 2015, the Obama administration negotiated the Trans-Pacific Partnership. In 2017, the Trump administration dropped out. But the other countries completed the agreement without the United States. The third way countries boost exports is to lower the value of their currencies. This makes their export prices comparatively lower in the receiving country. Central banks do this by lowering interest rates. A government can also print more currency or buy up foreign currency to make its value higher. Countries that try to compete by devaluing their currencies are accused of being in currency wars.http://www.eximgth.com

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