The buying and selling of goods are termed as Trade. When the buying and selling happen within the same country, it is called as Inland Trade and when buying and selling happen between two countries, it is termed as Foreign Trade.
In other words, we can say, Foreign Trade is an exchange of capital, goods, and services across international borders or territories.
Trading globally gives consumers and countries the opportunity to be exposed to new markets and products. Almost every kind of product can be found on the international market: food, clothes, spare parts, oil, jewelry, wine, stocks, currencies, and water. Services are also traded: tourism, banking, consulting and transportation. A product that is sold to the global market is an export, and a product that is bought from the global market is an import. Imports and exports are accounted for in a country’s current account in the balance of payments
Increasing international trade is crucial to the continuance of globalization. Without international trade, nations would be limited to the goods and services produced within their own borders.
The main difference is that international trade is typically more costly than domestic trade. The reason is that a border typically imposes additional costs such as tariffs, time costs due to border delays and costs associated with country differences such as language, the legal system or culture.
India exports approximately 7500 commodities to about 190 countries, and imports around 6000 commodities from 140 countries. India exported US$318.2 billion and imported $462.9 billion worth of commodities in 2014.
Visible trade is one which can be seen, that is, trade of goods – merchandise. On the other hand, exchange of services between a buyer and seller is invisible. Services rendered by a person of one country to the person of another country cannot be seen. Examples are the transfer of technical knowledge, payment of insurance premium, transportation charges, and fees payable to professional experts whose services are sought from abroad.
Foreign Exchange is a process by which a currency of one country is converted into the currency of another.