• For a long time foreign trade has been the main channel connecting countries.
  • foreign trade creates an opportunity for the producers to reach beyond the domestic markets, i.e., markets of their own countries.
  • Producers can sell their produce not only in markets located within the country but can also compete in markets located in other countries of the world.
  • Similarly, for the buyers, import of goods produced in another country is one way of expanding the choice of goods beyond what is domestically produced

The Case of Indian Mobile Companies and rise of Chinese Companies such as Oppo and Xiomi

  • Chinese companies learn an opportunity to export product to India
  • The smart phones came from China have better specification and has best in pricing.
  • Hence , It started capturing the market very soon.
  • As a result of trade, Chinese Smart Phones come into the Indian markets.
  • In the competition between Indian and Chinese Smart Phones, Chinese Smart Phones prove better.
  • Indian buyers have a greater choice of Smart Phones and at lower prices.
  • For the Chinese makers, this provides an opportunity to expand business.
  • The opposite is true for Indian makers.
  • They face losses, as their Smart Phones are selling much less.

Result of Opening of Market

  • with the opening of trade, goods travel from one market to another.
  • Choice of goods in the markets rises.
  • Prices of similar goods in the two markets tend to become equal.
  • And, producers in the two countries now closely compete against each other even though they are separated by thousands of miles!
  • Foreign trade thus results in connecting the markets or integration of markets in different countries.


  • Technology Rapid improvement in technology has been one major factor that has stimulated the globalization process.
  • For instance, the past fifty years have seen several improvements in transportation technology.
  • This has made much faster delivery of goods across long distances possible at lower costs.
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