What is Import?
The term Import can be defined as the process of buying of goods and services between two nations. It refers to the purchase of goods and services that are produced in a foreign country. The purchaser of the goods and services from another nation is known as importer.
SummarySource: Copyright © 2021 Kalkine Media
Understanding Import
Every country is enriched with different skills and resources; import allows countries to exchange these resources. Some countries are rich in technology, some are in natural resources, and some countries are in agriculture. Countries import the goods and services, which are not available in their nation.
Import offers different variety of goods and services, advanced technology, and natural resources to the counties, importer will import the goods and services according to the need of the domestic economy. Sometimes countries import more than its exports which leads the situation of trade deficit, in this situation nation has to borrow from other nations to pay the extra imports. Importer always import by keeping the balance between the import and export of the nation.
Frequently Asked Questions (FAQs)
What are the objectives of Import?
Countries do import with various objectives:
How does import work?
A country has to follow several steps for importing the goods and services. These steps are as follow:
What are the advantages of Import?
Advantages of import are:
Source: Copyright © 2021 Kalkine Media
Profit is the life blood of every business. In today’s era of competition, increasing the profit with same technology or quality is slightly hard. Companies import advance technology and new equipment’s to maximise the profit by giving tough competition in the market.
With the rise in the standard or living of consumer and the availability of variety of options, consumer focused on the quality of the goods and services. Companies import the high-quality raw material just to meet the demand of their consumers.
Importing helps in reducing the manufacturing cost such as raw material costing, Operation cost, intermediate goods cost, and wages. It will help the companies in generating high profit. Reduction of manufacturing cost is one the main concern of a company.
When a country faces the situation of emergency due to natural calamities like shortage of resources and food then importing is the way to avoid starvation. These natural calamities are unpredictable such as earthquake, flood, drought, cyclone etc.
Imports help the countries to make their relations better with each other. International trade is all about import and export which leads good strategic relation between them.
What are the disadvantages of Import?
Import is good in many ways for a country or a business but in some ways, it has a few disadvantages:
Source: Copyright © 2021 Kalkine Media
Outflow of foreign exchange is one of the biggest disadvantages of imports as a company has to pay in their currency for importing goods and services, which pressure the domestic currency and lead reduction in foreign exchange of the country. Counties have to maintain their Outflow of Foreign Exchange. If a country imports more than its export, the currency rate will fall in international market and other currency will take dominating position.
Imports directly affect the domestic manufactures and local industries. Domestic industries would shut down one day if a country focused on buying goods from other countries instead of their local suppliers. This is not good for the domestic economy.