| Definition |
Purchase of goods and services by a country from other countries. |
Sale of goods and services by a country to other countries. |
| Flow Direction |
Inward flow of goods, services, and capital into the country. |
Outward flow of goods, services, and capital from the country. |
| Purpose |
To meet domestic demand for foreign products or resources not available locally. |
To earn foreign exchange and expand market reach for domestic products. |
| Currency Usage |
Foreign currency is paid by the importing country. |
Foreign currency is received by the exporting country. |
| Trade Balance Impact |
Increases trade deficit if imports exceed exports. |
Improves trade surplus if exports exceed imports. |
| Revenue Effect |
Government may impose import duties to generate revenue. |
Export incentives or subsidies may be offered to boost exports. |
| Impact on Domestic Industry |
May harm local producers if imports are cheaper or better. |
Supports domestic industry by expanding markets and increasing production. |
| Economic Role |
Helps fill supply gaps and access advanced technology or goods. |
Drives economic growth through increased production and employment. |
| Examples |
India imports crude oil, gold, electronics, and machinery. |
India exports textiles, software, pharmaceuticals, and agricultural products. |
| Customs Involvement |
Goods are cleared through customs with import duties. |
Goods are declared and cleared for international shipping. |
| Foreign Exchange Impact |
Leads to outflow of foreign currency. |
Leads to inflow of foreign currency. |
| Dependency |
Increases dependency on foreign goods or countries. |
Reduces dependency and builds economic strength. |
| Trade Policies |
Subject to import quotas, tariffs, and restrictions. |
Subject to export regulations, licenses, and compliance norms. |
| Market Focus |
Focus on meeting domestic consumer or industrial needs. |
Focus on tapping into foreign demand and market expansion. |
| Balance of Payments |
Recorded in the current account as debit entry. |
Recorded in the current account as credit entry. |
| Strategic Consideration |
Used to fulfill strategic needs like energy or defense equipment. |
Used for diplomatic ties and economic influence abroad. |
| Influence on GDP |
Does not directly contribute to GDP; may reduce net exports. |
Directly contributes to GDP as part of net exports. |
| Control Mechanisms |
Controlled by import tariffs, quotas, or bans. |
Encouraged through subsidies, incentives, and trade missions. |
| Impact on Prices |
Can lower domestic prices through competition. |
May cause shortages if domestic supply is diverted abroad. |
Import vs Export