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ic policies has largely been based on foreign and domestic trade. Moreover, trade amongst nations is broadly used for two purposes, which include gaining comparative advantage and secondly achieving greater economies of scale. The notion of comparative advantage was introduced by the famous economists David Ricardo, who stated that the productivity and resource levels varied amongst different nations. Furthermore, these differences in the availability of particular resources in one country gave it a comparative advantage over other countries. Hence, a country with comparative advantage of a good is able to improve productive efficiency within that industry and also increase exports to other nations that may rely on this particular commodity. Accordingly, countries who may not have access to particular resources may import them from other nations who have comparative advantage. In the case of India, the nation has a comparative advantage within the textiles industry. Whereas, some of the more developed western nations such as USA and EU countries have the advantage of vehicles technology intensive products. In general, the exports of goods from one economy and the imports of goods by another economy are usually referred to as inter-industry trade. Furthermore, the second main motive of trade is based on achieving economies of scale. The basic principle behind this concept is that, if a particular nation decides to expand the size of domestic industries and hence increase the size of production, it will be able to lower output cost per unit. Thus the nation will be to become more efficient and competitive, since it is able to manufacture products at relatively low costs. Moreover, an increase in efficiency within the industry also enables manufacturers to engage in product differentiation, which can increase the demand for the particular goods.

There are also some other benefits associated with trade amongst countries. One of the advantages of international trade is that it enables trading partners to have access to foreign resources and markets; hence it encourages a greater specialisation and division of labour. In addition, trade can also increase productivity of a country by improving the efficiency of resource allocation and therefore can boost the level of competitiveness of a country. Moreover, trade also has a considerable impact on the welfare and general living standards of people in developing nations, for instance in India the surge in foreign direct investment and transfer of new technology and training has improved labour standards substantially and consequently the average standard of living.

Nevertheless, there are also several main arguments made against the idea of international trade between nations. The crucial argument made by both developed and developing countries, places great emphasis on the fact that trade can have unfavourable effects on the domestic economy. For example, trade liberalisation would mean that established companies operating in developing countries can engage in off-shoring, since it is much cheaper to set up in less developed countries with relatively cheap labour. Therefore, many employees working in the home country will risk losing their jobs to foreign workers. Secondly, the rise in gap between low skilled labour and high skilled labour can also本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。