Imports involve transfer of goods and services from a foreign country to home country.
Exports on the other hand, entail transfer of goods and services from a home country to the foreign consumers.
Import export trade assumes huge importance in the context of overall performance of the world economy. An upward trend of import export trade is indicative of smooth functioning of the world economy; whereas a downward trend results from economic instability.
Proper import administration is essential for ensuring free inflow of goods and services to a home country. Tariffs, quotas, and government subsidies stand in the way of free flow of goods and services.
The principal objective of import administration is to enforce proper anti-dumping measures and implement fair trade practices across borders. Competitive import trade environment helps in increasing inflow of foreign funds to a home country. It also increases competitiveness of the domestic market.
Export TradeExport trade is the primary source of foreign exchange for a country. A country gains from exporting a commodity or service if it has significant comparative advantage of producing that commodity or service over its foreign competitor.
As per Heckscher-Ohlin model of international trade, a country specializes in and exports a commodity that intensively uses the factor of production, which is in abundant supply in that country. Gains from export trade depend on the difference between autarkic terms of trade of the country of import and the country of export. Customs authorities of different nations are in charge of enforcing codes and regulations to ensure fair export trade practices in the international market.