The importance of foreign trade can be explained from the view point of Imports.
1) Reduces Domestic Shortages :
No country in the world is self sufficient in all its needs. Even the highly developed nations like USA, Japan, and Germany need to import items from other countries. A country imports those items for which it facts scarcity. Thus, imports helps to reduce domestic shortages.
2) Up-gradation of Technology :
Less developed countries (LDCs) have problem of advanced technology. the LDCs can import technology from developed countries (DCs). Thus, through import of technology and improve its economic development.
3) Lower Price :
A country will import those items which it finds difficult and expensive to produce. If it produces such items the prices will increase. Thus, imports help to reduce prices of goods.
4) Employment :
Imports generate employment. Direct employment in import sector. Indirect employment in other sector of economy such as industry, where the imported goods are used.
5) Efficiency :
Imports help to generate efficiency in the country. If there are no imports, domestic (Indian) businessmen would be lazy and lethargic, and they will not make good efforts to improve quality of goods. Because of imports. the domestic producers will make good efforts to improve the quality of products and services so as to compete, with the imported goods.
6) Economic Development :
Imports facilitates economic development of a nation. this is because of import of capital goods and technology, a country can generate growth in all sectors of the economy, i.e., agriculture, industry, and service sector.
7) Assistance during Natural Calamities :
A country affected bby natural calamities like major earthquake or flood, then it can receive assistance from other countries. A country can import food-grains and medicines from other countries to help the affected people.
8) Standard of Living :
Import can facilitate standard of living of the people. this is because, people can have a choice of new and better varieties of goods and services. By consuming new and better varieties of good, people can improve their standard of living.