(i) Optimum Use of Resources: Foreign trade leads to international division of labour and specialisation. It reduces wastage of resources resulting from the production of uneconomic goods. The resources are also used efficiently.
(ii) Standard of Living: Foreign trade increases the standard of living of the people living in different countries. It provides commodities to the people of a country which cannot be produced economically in that country. Foreign trade also makes them available the products which are not produced in that country.
(iii) International Relations: Foreign trade makes different countries dependent upon each other. A country having surplus products can sell its surplus stock to the deficient countries and a country having deficiency of a product can import it from another country. This promotes goodwill and cordial relations among the nations of the world.
(iv) Stabilisation of Prices: Foreign trade leads to stabilisation of prices of commodities throughout the world by adjusting demand and supply. This would not have been possible in the absence of foreign trade.
(v) Employment: Foreign trade helps in increasing employment opportunities in the export-oriented industries.
(vi) Economies of Large-scale: Foreign trade facilitates specialisation of a country in the production of certain goods. This will help to carry on production of some commodities not only for home consumption, but also for external consumption. This will lead to several economies of large-scale production. The resources will also be utilised in a better way.
(vii) Growth of Economy: Under- developed and developing countries can exploit their unutilised natural resources with the import of technical know-how, machinery and equipment from the advanced countries.
