Distinguish between foreign trade and foreign investment. - Vidyadip

Question

Distinguish between foreign trade and foreign investment.

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Answer

BASIS FOR COMPARISON	FOREIGN TRADE	FOREIGN INVESTMENT
Meaning	Foreign trade implies the trade of goods, services and capital between two countries of the world.	Foreign investment refers to an investment made in a company from a source outside the country.
Need	Resource endowment	Capital requirement
Result	Integration of markets of different countries.	Additional investment in the form of capital, technology and other resources.
Advantage	It creates an opportunity for the producers to cover the international markets.	It brings long-term capital to the company.
Objective	To earn profit and excel global market.	To generate returns in long term.

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