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Why is international trade considered the economic barometer of a country?

International trade is considered as a barometer of economic progress of the country as it indicates the share of a country in world trade. It also leads to inflow of foreign exchange and capital investments in the country and contributes to infrastructural growth. Significantly, it is an indicator of the role of the country's economy in a globalised world trade scenario.

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Advancement of international trade of a country is an index to its economic prosperity. It is therefore considered the economic barometer of the country.

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Trade between two countries is called international trade. It may take place through sea, air or land routes. Advancement of international trade of a country is an index to its economic prosperity. It is, therefore, considered the economic barometer for a country.

Export: When the goods are sent to other country for sale it is called as export.

Import: When the goods come from other country to be sold in India it is called import.

Balance of Payment: This is the difference between export and import of a country. When export is higher than import then this is a situation of favourable balance of payment. On the other hand when the import is hihger than export then this is a situation of unfavourable balance of payment.

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