4 Most VSAQ’s of International Trade Chapter in Inter 2nd Year Commerce (TS/AP)

2 Marks

VSAQ-1 : Bonded Warehouses. (OR) What is Bonded Warehouses? (OR) Write a short notes on bonded warehouses.

Bonded warehouses are storage facilities that are typically located near ports or customs authorities. These warehouses are maintained by port authorities and offer a convenient solution for importers who may not require immediate access to their imported goods or intend to re-export them. Importers can store their goods in bonded warehouses, and in return, they are required to execute a bond in which they undertake to pay any applicable duties or taxes when they eventually take possession of the goods. Bonded warehouses play a crucial role in facilitating international trade by providing a secure and regulated storage option for imported goods.

VSAQ-2 : Write any two differences between Internal trade and International trade.

Geographic Scope

  1. Internal Trade: Internal trade, also known as domestic trade or home trade, involves the exchange of goods and services within the boundaries of a single country. Both buyers and sellers are typically located within the same nation.
  2. International Trade: International trade, on the other hand, involves the exchange of goods and services between different countries. It encompasses trade activities that occur across national borders, involving buyers and sellers from distinct nations.

Regulatory Environment

  1. Internal Trade: Internal trade is subject to the regulations, laws, and trade policies of a single country. It is typically governed by national or regional authorities and follows domestic trade regulations.
  2. International Trade: International trade is subject to a more complex set of regulations, including international trade agreements, tariffs, customs duties, and export/import regulations. It requires compliance with the trade laws of multiple countries and international organizations like the World Trade Organization (WTO).

VSAQ-3 : Bill of lading. (OR) What is Bill of Lading?

A Bill of Lading (BOL) is a critical document in international trade. It serves multiple purposes, including acknowledging the receipt of goods by a shipping company, outlining transport terms, and acting as proof of ownership during transit. This document is often mandatory for customs clearance and plays a pivotal role in trade finance, making it an indispensable part of international shipping and trade.

VSAQ-4 : Exchange Rate. (OR) What is Exchange Rate?

Exchange rate refers to the rate at which one currency can be exchanged for another currency. It essentially determines the value of a specific country’s currency in comparison to another. For international business transactions, exchange rates play a crucial role as they can significantly influence the cost and profitability of dealing with different currencies. In international trade, exporters often take measures to fix or hedge exchange rates in advance when engaging with international buyers, helping them manage currency-related risks effectively.