[Commerce Class Notes] on International Business Pdf for Exam

International business, also known as international trade or external trade. The opposite of International trade is internal trade. Internal trade is when the purchasing and selling are done in India. On the other hand, when purchasing and selling are done outside India it is called external trade. It sometimes is also referred to as a cold trade between two or more countries. International business is divided into three types, that are:

● Import

● Export

● Entrepot

International Trade: Nature

There are many characteristics of External Trade.

1. When two Countries are Involved – whenever an international business or trade is done. The involvement of two countries is always involved, no matter what. Only then the selling and purchasing are possible among countries.

2. When the Payment is Done in Foreign Trade – Whenever you are selling or buying goods or services to other countries, the payment is supposed to be done in their currency, that is the foreign currency only. Whereas, if any other country is trying to deal with your country, then the payment is supposed to be made according to your currency or money medium.

Problems that an International Trade or Business Face

Many problems might come in way of you and your business while doing international trade. Those problems are discussed below:

1. Restrictions – In some countries or areas, there are a few restrictions to foreign trade and business. Due to this, there are some goods and services that cannot be purchased from that particular country.

2. Legal Purchases – The main and most tiresome activity is the purchasing activity. Many legal steps are taken while making payments and everything has to be secured.

3. High Risk – A lot of times companies tend to interest money in foreign companies, of which they know nothing about. It might also include higher pay and other issues.

4. Language Barriers – It involves the clear reality that when you manage another country, you will observe a contrast between their language and your language, which makes it hard to impart. In this way, you need to guarantee that you either get familiar with their language well or decide on another way, so their words sound good to you since you can not make a fruitful arrangement until you can’t clear them appropriately.

Why do we do International Business?

Even after so many risks, you might be thinking that why do we even do foreign business? Here are the reasons to invest in foreign trade and business:

1. It includes the clear reality that when you deal with another country, you will notice a difference between their language and your language, which makes it difficult to bestow. Thusly, you want to ensure that you either get to know their language well or settle on another way, so their words sound great to you since you can not make a productive plan until you can’t explain them properly.

2. Only one out of every odd country has everything, along these lines, it needs to rely on upon the other country, someplace something is accessible and elsewhere, along these lines, a worldwide business must be finished.

3. Neither every one of the nations does not have a regular asset accessible nor they are great in each office, as assuming a country has great labor, however, does not have the monetary aid, so they must be reliant upon others.