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of people. Some countries prefer to import
goods from other countries even it is
produced there. Because the imported
goods are cheaper than they are produced
inside the country.

Present Status of Trade in Nepal

Nepal has been incurring loss in
foreign trade.

Nepal exports raw materials at low
level.

Nepal’s foreign trade is heavily concentrated on India than other countries.
Nepal imports readymade, luxurious and expensive goods and exports mainly
raw materials, readymade garments, carpets, curio, arts, other agricultural
materials and forest products.

Concept of Trade Balance

Trade balance means the comparison of the total imports and exports of goods per
annum. Trade balance can have both negative and positive value on the basis of
import and export of products.

Trade Surplus

If export is more than import it is trade surplus. Trade surplus is the profit or benefit
in trade. The ratio of export of goods should be more than import in a year is called
trade surplus. The basic conditions should be required to get trade surplus. They are:
more export than import, export of finished products rather than raw material and
encourage the export of machinery and expensive tools and equipment rather than
the cheaper products.

Importance of Trade and
Foreign Trade

We know that trade plays a vital role in
the growth of economy. It has a great
role for transforming the economy. It
has a great role for transforming the
economy of a country into progressive
path. It mobilizes the economy of a
country. Some of the importance of
trade and foreign trade are given below:
World Trade Organization

Dynamic Social Studies - Book IX 302