With the intention of earning more money, the essential goods needed by the home country are exported to other countries. This results in shortage of goods in the home country. With excessive exports, natural resources may get exhausted in a shorter period. This will cause economic downfall of the country in the long run.

When goods are imported from one country with the purpose of re-exporting to another country, it is called 'Entrepot Trade'. Import duty is not levied on these goods.
The need for Entrepot Trade are:
(i) Entrepot trade helps the import of goods where adequate banking facility is not available.
(ii) When, the volume of trade is not enough to carry regular foreign trade.
(iii) When, it is difficult to establish direct link between the exporting country and the consuming country.

Home trade refers to the trade within.a country. Whereas, the trade between different countries is called foreign trade. Trade with two countries is called bilateral trade and trade with many countries is called multinational trade.

1. Trade between two or more nations is called international trade or foreign trade.
2. Trade between two countries is called bilateral trade.
3. Trade among many countries is called multilateral trade. So, foreign trade may be bilateral or multilateral.
Need For International Trade:
Foreign trade increases the income of the country, natural resources are better utilized and the economic growth rate increases. It promotes development in science and technology.

1. Entrepot trade means importing of goods from one country and exporting the same to foreign countries.
2. It is also known as 'Re-export trade'.
3. E.g. Indian diamond merchants in Surat import uncut raw diamonds from South Africa.
4. They cut and polish the diamonds in their units in India and re-export them to the International Diamond Market in Amsterdam..