What are the Objectives, Purpose and Functions of Export Trade?

The main objectives of export trade are as follows:

(i) To sell surplus goods:

A country may produce a commodity in such quantities that are more than its needs. The country can sell its surplus output to foreign countries. In this way export trade is undertaken to make fruitful use of surplus goods.

(ii) To make better utilisation of resources:

Export trade widens the market for goods. A country can make better utilisation of its resources by producing goods on a large scale both for domestic use and exports.

(iii) To earn foreign exchange:

A country can earn valuable foreign exchange through ex­ports. The amount of foreign exchange so earned can be utilised to import scarce capital goods. Such imports are necessary for rapid economic development of the country.

(iv) To increase national income:

Export trade helps a country increase its national income. Increase in national income improves the quality of life of the people.

(v) To generate employment:

The growth of export trade creates employment opportunities for a large number of people.

(vi) To increase government revenue:

Export trade generates revenue for the government in the form of custom duty and excise duty. The government can spends more on public welfare activities.

(vii) To create international cooperation:

Export trade improves mutual understanding and cooperation between nations.