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Demerits of Foreign Trade – The Dark Side! 🌑

It's not all sunshine and rainbows.

1. Economic Dependence 🔗

  • If India depends on China for medicine raw materials (API), and China stops supply... India gets sick.
  • Risk: Loss of sovereignty.

2. Dumping 🗑️

  • China sells steel in India cheaper than the cost of production.
  • Goal: Kill Indian steel companies. Once they die, raise the price.
  • Result: Unemployment in India.

3. Import of Harmful Goods 🚬

  • Drugs, weapons, waste.

4. Exhaustion of Resources ⛏️

  • British took India's cotton and coal.
  • Developing nations often over-mine their resources to pay for imports.

5. Colonialism (History Lesson) 👑

  • East India Company came to Trade.
  • They stayed to Rule.
  • "Trade follows the Flag."
The Infant Industry Argument

New industries (Infants) need protection. If you force a baby to fight Mike Tyson (Global MNC), the baby will die. That's why we have Tariffs.

Quiz Time! 🎯

Test Your Knowledge

Question 1 of 5

1. Dumping refers to:

Throwing waste
Selling goods abroad cheaper than domestic price
Buying expensive goods
None

💡 Final Wisdom: "Fire cooks your food, but it can also burn your house. Trade is Fire. Handle with care!" 🔥

Next up: Trade Blocs - Let's start with PTA! 🤝

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