Import vs Export — Difference (with Table & FAQs)
Import vs Export compared side by side — a 6-row comparison table, 4 key points and 7 exam FAQs. Class 10 Social Science, free and no sign-up.
TL;DR: Import vs Export compared side by side — a 6-row comparison table, 4 key points and 7 exam FAQs. Class 10 Social Science, free and no sign-up.
Written & reviewed by the Syllab.in Academic Team (CBSE/NCERT subject experts) · Updated
The main difference between Import and Export: Imports are goods brought into a country from abroad. Exports are goods sent from a country to be sold abroad.
Import vs Export — Comparison Table
| Basis | Import | Export |
|---|---|---|
| Direction | Into the country | Out of the country |
| Purpose | To meet domestic demand | To earn foreign exchange |
| Trade Balance | Increases trade deficit | Increases trade surplus |
| Employment | May reduce domestic jobs | Creates employment |
| Customs Duty | Government collects customs duties | Government may provide subsidies |
| Example | Oil, electrical equipment imported in India | Textiles, software exported from India |
Key Points
- Imports fulfill domestic needs not met by local production
- Exports utilize surplus production and generate revenue
- Trade balance is difference between imports and exports
- India exports software, textiles, and agricultural products
Imports — goods and services bought in
Imports are the goods and services a country buys from other countries and brings into its own economy. A country imports when it cannot produce something at all, cannot produce enough of it, or can buy it more cheaply from abroad than it can make at home.
India's major imports fall into a few large categories: crude petroleum, which is by far the biggest, along with gold, electronic goods, machinery, and edible oils. Note that imports are paid for in foreign currency, so a large import bill draws down a country's foreign-exchange reserves.
Exports — goods and services sold out
Exports are the goods and services a country produces and sells to other countries. Exports earn foreign exchange, create employment at home and are the main way a domestic producer reaches a market larger than its own country.
India's major exports include petroleum products (refined from imported crude), gems and jewellery, pharmaceuticals, engineering goods, textiles and readymade garments, and agricultural products such as rice and spices. India is also a very large exporter of services, especially software and IT-enabled services — a point often missed because trade is assumed to mean physical goods only.
Balance of trade — the number that ties them together
The balance of trade is the value of a country's exports minus the value of its imports. It is the single figure that summarises the relationship between the two.
When exports exceed imports the balance is positive, called a trade surplus or a favourable balance of trade. When imports exceed exports it is negative — a trade deficit, or an unfavourable balance of trade. India has run a trade deficit for many years, largely because of its very large crude-petroleum and gold import bill.
Do not confuse the balance of trade with the balance of payments. The balance of trade covers visible goods only; the balance of payments is broader and includes services, income and transfers such as remittances sent home by workers abroad.
Why countries trade at all
No country has every resource or the ability to make everything efficiently. Foreign trade lets each country concentrate on what it produces relatively well and obtain the rest from others.
The gains are concrete: a wider choice of goods for consumers, access to raw materials a country lacks, the foreign exchange needed to pay for imports, and markets far larger than the domestic one. Foreign trade also links up the markets of different countries, which is the core of what globalisation means in the NCERT chapter.
Trade barriers, tariffs and liberalisation
A trade barrier is any restriction a government places on foreign trade. The commonest is a tariff — a tax on imports, which makes foreign goods costlier and so protects domestic producers from competition. Quotas, which cap the quantity that may be imported, are another.
India used heavy trade barriers after independence to protect its young industries. From 1991 these were substantially removed, a process called liberalisation, allowing goods to be imported and exported far more freely. The debate the chapter asks you to weigh is the trade-off: liberalisation gives consumers more choice and lower prices, but exposes small domestic producers to competition they may not survive.
Import vs Export — Worked Examples
- India buying crude oil from West Asia — An import. India cannot produce nearly enough crude to meet its own demand.
- Indian software services sold to a US company — An export — and a service export rather than a goods export.
- Basmati rice shipped to the Gulf — An export of an agricultural product, earning foreign exchange.
- A tax added to imported electronics — A tariff — a trade barrier that raises the price of the foreign good and shields domestic makers.
Common Mistakes Students Make
- Reversing the two. Imports come IN to the country; exports go OUT of it.
- Writing the balance of trade as imports minus exports. It is exports minus imports.
- Calling a trade deficit 'favourable'. A surplus is favourable; a deficit is unfavourable.
- Treating trade as goods only. Services such as software and tourism are a major part of India's exports.
- Confusing the balance of trade with the balance of payments — the latter is wider and includes services and transfers.
Diagrams
Where This Shows Up in Real Life
Why the rupee falls when oil prices rise
Crude petroleum is India’s largest single import, and it must be paid for in foreign currency, mostly US dollars. When the world oil price rises, India needs more dollars for the same quantity of oil, so demand for dollars increases and the rupee weakens against them. A weaker rupee then makes every other import costlier too, which is one route by which global oil prices feed into domestic inflation.
How a trade deficit is financed
India imports more than it exports, so the balance of trade is negative. That gap is partly filled by things the balance of TRADE does not count: earnings from software and IT services, tourism, and above all remittances sent home by Indians working abroad. This is exactly why the balance of PAYMENTS — which includes services and transfers — gives a fuller picture than the balance of trade alone.
What liberalisation changed after 1991
Before 1991 India used high tariffs and import quotas to shield domestic industry. After liberalisation those barriers were substantially reduced, and foreign goods and companies entered freely. Consumers gained choice and lower prices, and efficient Indian producers gained access to world markets. Small producers who could not match imported quality or price were the ones who suffered — which is the trade-off the NCERT chapter asks you to weigh rather than simply praise or condemn.
Why a country exports and imports the same kind of good
India both imports crude petroleum and exports refined petroleum products, which looks contradictory until you see the value added: India has large refining capacity, so it buys crude, processes it, and sells the products at a higher price. The same logic explains importing gold and exporting jewellery. Trade is not simply about what a country lacks — it is about where it can add value.
Solved Numericals — Step by Step
Problem 1. A country exports goods worth Rs 4,20,000 crore and imports goods worth Rs 6,80,000 crore in a year. Find the balance of trade and state whether it is favourable.
- Balance of trade = value of exports − value of imports.
- = 4,20,000 − 6,80,000
- = −2,60,000 crore.
- The result is negative, so imports exceed exports.
Answer: A trade deficit of Rs 2,60,000 crore — an UNFAVOURABLE balance of trade.
Problem 2. A tariff of 20% is imposed on an imported item costing Rs 5,000. What does the buyer now pay, and what is the effect on domestic producers?
- Tariff amount = 20% of 5,000 = 0.20 × 5,000 = Rs 1,000.
- New price = 5,000 + 1,000 = Rs 6,000.
Answer: Rs 6,000. The imported good is now costlier, so domestic producers become relatively more competitive — which is precisely the purpose of a tariff as a trade barrier.
Board-Style Questions with Model Answers
Distinguish between imports and exports, giving two Indian examples of each. (3 marks)
Imports are goods and services that a country buys from other countries and brings into its own economy, usually because it cannot produce them at all, cannot produce enough, or can obtain them more cheaply abroad. They must be paid for in foreign currency, so they draw down foreign-exchange reserves. India’s major imports include crude petroleum, which is the largest by value, and gold. Exports are goods and services that a country produces and sells to other countries; they earn foreign exchange, generate employment and give producers access to markets larger than the domestic one. India’s major exports include refined petroleum products and pharmaceuticals, along with gems and jewellery, textiles and software services.
What is the balance of trade? Distinguish between a favourable and an unfavourable balance. (3 marks)
The balance of trade is the difference between the value of a country’s exports and the value of its imports of visible goods, calculated as exports minus imports. When exports exceed imports the balance is positive, which is called a trade surplus or a favourable balance of trade, and the country earns more foreign exchange than it spends on goods. When imports exceed exports the balance is negative, which is called a trade deficit or an unfavourable balance of trade. India has recorded a trade deficit for many years, largely because of its very large crude-petroleum and gold import bills. The balance of trade should not be confused with the balance of payments, which is broader and also includes services, income and transfers such as remittances.
What are trade barriers? Why do governments use them, and what changed in India after 1991? (5 marks)
A trade barrier is any restriction imposed by a government on foreign trade. The most common is a tariff, a tax on imports that raises their price; another is a quota, which caps the physical quantity that may be imported. Governments use them chiefly to protect domestic producers from foreign competition, to shield young industries until they can compete, to reduce a trade deficit and to safeguard employment at home. After independence India used heavy trade barriers for precisely these reasons. From 1991 the government substantially removed them as part of liberalisation, allowing goods to be imported and exported far more freely and permitting foreign companies to set up in India. The results were mixed and both sides must be stated: consumers gained a much wider choice at lower prices, and efficient Indian producers gained access to world markets, but many small domestic producers could not withstand the competition and were forced to shut down.
How does foreign trade contribute to globalisation? (3 marks)
Foreign trade connects the markets of different countries. A producer is no longer limited to selling within national borders, and a buyer is no longer limited to what is made locally, so goods travel between countries and prices and quality tend to converge. This integration of national markets into an increasingly connected world market is what the NCERT chapter means by globalisation. Foreign investment and the spread of multinational companies deepen the process further, since production itself becomes spread across countries. In India the reduction of trade barriers after 1991 is what accelerated this integration, which is why liberalisation and globalisation are studied together.
Assertion–Reason Questions (CBSE Format)
For each question choose: (a) both A and R are true and R is the correct explanation of A; (b) both are true but R is not the correct explanation; (c) A is true but R is false; (d) A is false but R is true.
1. Assertion (A): India has an unfavourable balance of trade.
Reason (R): India’s imports, led by crude petroleum, exceed its exports in value.
Answer: (a) — Both are true and the reason explains the assertion. An excess of imports over exports is by definition an unfavourable balance, or trade deficit.
2. Assertion (A): Tariffs make imported goods cheaper for consumers.
Reason (R): A tariff is a tax imposed on imported goods.
Answer: (d) — The assertion is false — a tariff makes imports COSTLIER, which is its purpose. The reason correctly defines a tariff, and is in fact why the assertion is wrong.
3. Assertion (A): The balance of trade and the balance of payments are the same thing.
Reason (R): Both compare what a country receives with what it pays abroad.
Answer: (d) — The assertion is false: the balance of trade covers visible goods only, while the balance of payments also includes services, income and transfers such as remittances. The reason is loosely true but does not make them identical.
4. Assertion (A): Liberalisation after 1991 benefited Indian consumers but harmed some small producers.
Reason (R): Removing trade barriers increased both the choice available and the competition faced.
Answer: (a) — Both are true and correctly linked. This two-sided outcome is exactly the trade-off the chapter asks students to evaluate.
Quick Self-Check
Q1. Goods bought from other countries are called:
- A. Exports
- B. Imports
- C. Tariffs
- D. Surplus
Answer: B. Imports — Imports come into a country from abroad; exports go out to other countries.
Q2. The balance of trade is calculated as:
- A. Imports − exports
- B. Exports − imports
- C. Exports + imports
- D. Exports ÷ imports
Answer: B. Exports − imports — Balance of trade = value of exports − value of imports. A positive result is a surplus.
Q3. A tax imposed on imported goods is called a:
- A. Quota
- B. Tariff
- C. Subsidy
- D. Remittance
Answer: B. Tariff — A tariff is a tax on imports, used as a trade barrier to make foreign goods costlier and protect domestic producers.
Q4. India's largest import by value is generally:
- A. Textiles
- B. Crude petroleum
- C. Rice
- D. Software
Answer: B. Crude petroleum — Crude petroleum is consistently India's biggest import. Textiles, rice and software are exports, not imports.
Key Terms Glossary
- Import
- A good or service bought from another country and brought in. Paid for in foreign currency.
- Export
- A good or service produced domestically and sold to another country. Earns foreign currency.
- Foreign trade
- The exchange of goods and services between countries — imports plus exports.
- Balance of trade
- Value of exports MINUS value of imports, counting visible goods only.
- Trade surplus
- Exports exceed imports — a favourable balance of trade.
- Trade deficit
- Imports exceed exports — an unfavourable balance of trade. India’s long-standing position.
- Balance of payments
- Broader than the balance of trade: also includes services, income and transfers such as remittances.
- Tariff
- A tax on imports, used as a trade barrier to make foreign goods costlier.
- Quota
- A limit on the quantity of a good that may be imported.
- Trade barrier
- Any government restriction on foreign trade, such as a tariff or a quota.
- Liberalisation
- The removal or reduction of trade barriers. Began in India in 1991.
- Globalisation
- The integration of national markets into one connected world market, accelerated by foreign trade and investment.
One-Minute Revision
- IMPORTS come IN and COST foreign exchange. EXPORTS go OUT and EARN it.
- Balance of trade = EXPORTS − IMPORTS. Never the other way round.
- Exports > imports = SURPLUS = favourable. Imports > exports = DEFICIT = unfavourable.
- India runs a TRADE DEFICIT, mainly because of crude petroleum and gold.
- Balance of TRADE = visible goods only. Balance of PAYMENTS also counts services and remittances.
- TARIFF = tax on imports (raises their price). QUOTA = limit on quantity. Both are trade barriers.
- Trade is not only goods — India is a major exporter of SOFTWARE and IT services.
- Liberalisation (1991) cut barriers: more choice and lower prices, but pressure on small producers.
Syllabus reference: NCERT Class 10 Social Science (Economics), Chapter 4 — Globalisation and the Indian Economy; foreign trade in Geography, Chapter 7.
Frequently Asked Questions
What is the difference between import and export?
Import means buying goods and services from another country into your own country. Export means selling goods and services from your country to another country.
Give an example of import and export for India.
India imports crude oil and electronics; India exports tea, textiles, software services and spices.
What is the balance of trade?
The balance of trade is the difference between a country’s total exports and total imports. Exports more than imports is a trade surplus; imports more than exports is a trade deficit.
What is the difference between import and export?
Imports are goods and services a country buys from abroad and brings in, paid for in foreign currency. Exports are goods and services a country produces and sells to other countries, which earn foreign currency. In short, imports flow in and cost foreign exchange; exports flow out and earn it.
What is an unfavourable balance of trade?
It means the value of a country's imports exceeds the value of its exports, producing a trade deficit. India has run a trade deficit for many years, largely because of its very large crude-petroleum and gold import bills.
What are trade barriers and why are they used?
Trade barriers are government restrictions on foreign trade, most commonly tariffs (taxes on imports) and quotas (limits on quantity). Governments use them to protect domestic producers from foreign competition, and India relied on them heavily before liberalisation began in 1991.
How does foreign trade connect to globalisation?
Foreign trade links the markets of different countries: producers can sell beyond their own borders and buyers can choose goods made anywhere. That integration of national markets into one connected system is what the NCERT chapter means by globalisation, and reducing trade barriers after 1991 is what accelerated it in India.