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Import Trade Explained for ZIMSEC Students

Import trade involves purchasing goods and services from other countries for resale or consumption. Key reasons for importing include local unavailability, better quality, cost advantages, variety, and technology transfer. The import process includes steps such as inquiry, order placement, payment arrangements, shipping, customs clearance, and delivery, while challenges include high duties, delivery delays, and quality risks.

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271 views3 pages

Import Trade Explained for ZIMSEC Students

Import trade involves purchasing goods and services from other countries for resale or consumption. Key reasons for importing include local unavailability, better quality, cost advantages, variety, and technology transfer. The import process includes steps such as inquiry, order placement, payment arrangements, shipping, customs clearance, and delivery, while challenges include high duties, delivery delays, and quality risks.

Uploaded by

lloydnyoni97
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd

Here are clear and simplified notes on IMPORT TRADE suitable for ZIMSEC Commerce

students:

✅ IMPORT TRADE
➡️Definition

Import trade refers to the buying of goods and services from other countries into one's own
country for resale or consumption.

✅ Reasons for Importing Goods


1. Unavailability of Goods Locally
o Some products are not produced in the home country (e.g.,
crude oil, vehicles).

2. Better Quality
o Some countries produce goods of superior quality.

3. Cost Advantage
o It may be cheaper to import than to produce locally.

4. Variety of Products
o Imports provide consumers with a wide variety of choices.

5. Technology Transfer
o Importing advanced machinery and technology enhances local
production.

✅ Types of Imports
1. Visible Imports
o Physical goods imported, e.g., cars, clothes, machinery.

2. Invisible Imports
o Services bought from other countries, e.g., foreign
consultancy, tourism, banking services.

✅ Import Trade Procedure


1. Enquiry
o Buyer asks the foreign seller for details and prices.

2. Order Placement
o Buyer places an order for the goods.

3. Import Licence
o Sometimes needed to import certain goods legally.

4. Payment Arrangement
o Methods include cash, bank drafts, or letters of credit.

5. Shipping
o Goods are shipped from the exporter to the importer.

6. Customs Clearance
o Goods are inspected and duty is paid before entry.

7. Delivery
o Goods are delivered to the buyer after clearance.

✅ Documents Used in Import Trade


 Proforma Invoice: Quotation showing price before sale is
confirmed.
 Bill of Lading: Proof that goods are being shipped.
 Import Licence: Permission to import certain restricted goods.
 Certificate of Origin: States where the goods were manufactured.
 Insurance Certificate: Covers goods against risks during transit.

✅ Challenges of Import Trade


 High import duties and tariffs.
 Delays in delivery due to long distances.
 Foreign exchange fluctuations affecting prices.
 Risk of receiving low-quality or damaged goods.
 Complicated customs procedures.

✅ Exercise Questions
1. What is import trade?
2. State two reasons why a country may import goods.
3. Differentiate between visible and invisible imports with examples.
4. List three documents used in import trade.
5. Identify two problems faced in

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