SIGNIFICANCE OF TRADE TO INDIA

  • Economic Growth: Trade creates numerous job opportunities through the several industries set up to meet the demand of various goods. A high demand of certain goods encourages specialization in production, which lead to high quality of goods
  • Foreign exchange: Through international trade a country is able to acquire foreign currency which enables the said country to import goods from other countries.
  • Industrial growth: Goods with a high demand stimulate industrial growth because several manufacturers compete to put up industries to meet the demand.




  • Source of revenue: Trade generates revenue to a country through taxation of commodities and services rendered. Sales tax and other custom duties are some of the ways of raising revenue for a country.
  • Development of Infrastructure: Trade usually demands good transport facilities, as this enables goods to reach their destination in good time.
  • Employment opportunities. Trade creates employment opportunities in the industries that are established/creates self-employment.
  • Expansion of agriculture. An increase in demand for agricultural goods will encourage the farmers to grow more of the items to meet the people‚Äôs demands.
  • Development of settlements. Major trading centres attract dense settlements
  • Regional cooperation. Trade enhances cooperation between INDIA and the trading partners.

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9 STEPS TAKEN TO ENCOURAGE EXPORT TRADE AND REDUCE IMPORT TRADE IN EAST AFRICA




The following are steps taken to encourage export trade and reduce import trade in East Africa

  • The three countries are building manufacturing industries (export promotion industries) to enable them to stop importing manufactured goods.
  • Heavy duties (taxes) are levied on imported manufactured goods to discourage their demand on the local market as well as protect the local infant industries.
  • Foreign investors are attracted to set up big industries in the region by giving them tax holidays.
  • Tax holidays are also given to infant industries to enable them to start producing goods locally.




  • Formation of regional blocks e.g. East African Community (E.A.C) to encourage cross-border trade without any restrictions.
  • Carrying out extensive market research to diversify the markets and create more demand abroad for locally made items.
  • Increased advertisements through international media to create awareness about East Africas products which increases demand.
  • Ensuring political stability has attracted more foreign investors to set up industries in East Africa.
  • Encouraging economic diversification by the government to reduce dependence on agriculture and encourage industrial development.




N.B: the three countries are trying their best to develop both visible trade and invisible trade.

  • Visible trade is the trade in imports and exports of tangible products like agricultural and manufactured goods.
  • Invisible trade refers to the trade in services such as tourism, health, labour and education.




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