Various gains from international trade can be summariseed below


Various gains from international trade can be summariseed below:

(i) It encourages territorial division of labour or international specialisation because economies of scale are realised from expanded markets.

(ii) International specialisation and eco-nomies in production lead to increase in productivity, low costs and cheaper prices.


(iii) International trade increases real income and consumption. This leads to expansion of employment and output and promotes economic growth.

(iv) Trade enables a country to conserve certain scarce resources because the commodities which embody these resources can be imported from countries where they are abundant.

(v) Trade increases competition and efficiency in the trading countries.

(vi) Trade leads to optimum allocation of resources.


(vii) Trade makes possible the consumption of a variety of goods and thus improves the welfare of the people of the trading countries.

(viii) International trade makes available even those goods which cannot be domestically produces.

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