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in International Business by (29.6k points)
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Sri. Swamynathan, a pure Gandhian, is of the view that India should never go for international trade for it results in draining out of scarce resources, dampen the domestic trade and this will lead to the complete destruction of our nation. How do you evaluate Mr. Swamynathan’s statement?

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Benefits of International Business: 

The benefits of international business to the nations and business firms are: 

Benefits to Nations 

1. Earning of foreign exchange: 

It helps a country to earn foreign exchange which can be used for importing capital goods, technology, petroleum products and fertilisers, pharmaceutical products, etc. 

2. More efficient use of resources: 

External trade enables a country to utilize the available resources in the best possible manner. 

3. Improving growth prospects and employment potentials: 

External trade helps to accelerate the economic growth and employment opportunities of a country. 

4. Increased standard of living:

Foreign trade helps in raising the standard of living of a country.

5. International relation: 

External trade helps to promote harmonious and cordial relationship among the nations.

Benefits to Firms 

1. Prospects for higher profits: 

When the domestic prices are lower, business firms can earn more profits by selling their products in countries where prices are high. 

2. Increased capacity utilisation: 

It helps firms in using their surplus production capacities and improving the profitability of their operations. Large scale production helps to reduce the cost of production. 

3. Prospects for growth: 

It helps firms in improving their growth prospects by creating demands for their products in foreign countries. 

4. Enhances competition: 

External trade enhances competition, which compels the domestic firms to improve the technology of production, production process and quality of the products. 

5. Improved business vision: 

It improves business vision as it makes firms to grow, more competitive and diversified.

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