The main difference between import and export is that import refers to the purchase of the goods and services from other countries to the homeland while the export refers to selling goods and services from the home country to other countries.
Import vs. Export
Import is that formation of trade in which goods are acquired by a domestic company from other countries to sell them in the home market. On the other hand, export implies a dealing in which a company sells goods to other countries which manufactured domestically. Import is the process in which goods of the foreign country are brought to the home country, to resell them in the domestic market. Inversely, export implies the process of sending goods from the homeland to a foreign country for selling purpose. The main aim of import is to carry out the demand of goods and services that are lacking or not available in the domestic country while the main aim of export is to create more overseas income from the selling of domestic products and to increase the global presence of domestic products and services. Excessive import can hurt the domestic economy. On the other hand, excessive export can benefit the domestic economy since it increases the foreign income to the home country.
What is Import?
Imports are external products and services bought by a resident of a country. Residents consist of citizens, businesses, and authority. No matter what the imports are or how they consigned. They can be transported, sent by email, or even hand-carried in personal baggage on a plane. If they are originated in a foreign country and sold to home residents, they are imports. Import shows the bringing of foreign goods or services in another country, where the products will be processed, used, sold or exported. Generally, countries lean to import goods or services that they cannot produce at the same low cost or with the same capability that other countries can. Countries are most likely to import goods or services that their domestic industries cannot produce as efficiently or cheaply as the exporting country.
Countries may also import raw materials or commodities that are not available within their borders. For example, many countries import oil because they cannot produce it domestically or cannot produce enough to meet demand. Free trade agreements and tariff schedules often dictate which goods and materials are less expensive to import. Imports are important for the nation’s economy because they allow a country to supply nonexistent, scarce, high cost or low quality of certain goods or services, to its market with products from other countries. A country needs an import when the price of the goods or services on the world market is less than the price on the domestic market. Many small businesses import items that cannot be made in other countries economically. There are two basic types of import. i.e, Industrial and consumer goods and Intermediate goods and services.
What is Export?
Exports are the products and services produced in one country and purchased by residents of another country. It doesn’t matter what the products or service is. If the goods are produced domestically and sold to someone in a foreign country, it is an export. Businesses export commodities and services where they have a require advantage. That means they are preferable than any other companies at given that product. They also export things that emulate the country’s comparative advantage. Countries have comparative advantages in the products they have a natural ability to produce. Governments strengthen exports. Exports increase jobs, bring in higher wages, and increase the standard of comfort for residents. Many manufacturing firms began their global expansion as exporters and only later switched to another mode for serving a foreign market. Exports are an essential component of a country’s economy, as the sale of such goods adds to the producing nation’s gross output. It occurs on an international scale and is most common where nations have fewer trade restrictions such as taxes. Almost every large company in advanced economies extract a portion of dividends, sometimes quite substantial, from exporting to other countries. Exporting is one of the basics to help economies grow, and one of the key functions of foreign negotiation is the increase of trade between nations. Exporting is one way that businesses can vastly expand their potential market. There are many key results of exports which are;
- Exports are one of the earliest forms of economic transfer and exist on a large scale among nations.
- Exporting can boost sales and profits if they reach new markets, and they may even present an occasion to capture significant global market share.
- Companies that export heavily typically exposed to a higher degree of financial risk.
- Import appears, when domestic companies buy products abroad and bring them to a domestic country for sale while export appears when the domestic companies sell their products or services abroad.
- The level of import directly turns to the exchange rate of the local currency; on the other hand, The level of export strictly connected with the exchange rate of local currency.
- If your local currency is weak, then the import level decreases, and if your local currency is strong, then the export level decreases.
- The main idea in the back of importing the goods from another country is to fulfill the demand for a particular product which is not present or in shortage in the home country. On the other hand, the elemental reason for exporting goods to another country is to increase the overall existence or market coverage.
- Import at a high level shows a booming domestic demand, which indicates that the economy is growing. As against, the high level of export represents a trade surplus, which is good for overall growth of the economy.
There are two courses to import/export products and services, wherein direct exporting/importing is one in which the firm access the overseas buyers/suppliers directly and completes all the constitutional formalities concerned with goods and financing. After all, in case of indirect exporting/importing the firms have very little assistance in the operations, rather mediators perform all the tasks and so in indirect exporting the firm has no direct interaction with the overseas customers in case of exports and suppliers in case of imports.