The meaning of Import:
Imports are defined as purchases of good or services by a domestic economy from a foreign economy. The domestic purchaser of the good or service is called an importer. The word “import” is derived from the word “port,” since goods are often shipped via one port to another.
The significance of Import:
Every country is endowed with certain advantages in resources and skills. For example, some countries are rich in natural resources, such as fossil fuels, timber, fertile soil or precious metals and minerals, while other countries have shortages of many of these resources. Additionally, some countries have highly developed infrastructures, educational systems, and capital markets that permit them to engage in complex manufacturing and technological innovations, while many countries do not.
There are basically five main reasons for which a country may decide to import a certain good or service:
1. It simply does not exist in the country: a mineral which is not in the country’s soil, an agriculture product that can’t be produced there, an innovation that has been introduced in other countries;
2. It does not exist at a specific level of quality; thus, a country imports better products than domestic production, also as far as advertising or packaging are concerned;
3. It represents a product variety that is appreciated domestically but not available in the domestic market
4. It is cheaper abroad since producers there are more efficient, are faced with lower costs, better exploit economies of scale and/or accept lower profits;
5. At the current domestic price, producers do not supply enough good or service as the demand requires.