What are the effects of foreign trade?
Effects of foreign trade are as follows:
- Chinese have started exporting Chinese plastic toys to India.
- Buyers in India now have the option of choosing between Indian and Chinese toys.
- Because of the cheaper prices and new designs, Chinese toys have become more popular in the Indian markets.
In the competition between Indian and Chinese toys, Chinese toys prove better. With the result, Indian toy-makers face losses, as their toys are selling less.