WHAT ARE THE DIFFERENCES BETWEEN “FOREIGN TRADE” AND “FOREIGN AID”?

The term foreign trade and foreign aid are different by meanings and objectives.

There is a vast difference between them, the main differences are as follows:

No.Foreign AidForeign Trade
   
1Foreign aid is the money that oneForeign trade is exchange of capital,
 country voluntarily transfers to anothergoods, and services across international
 country.borders or territories.
2There are three types of foreign aid:There are three types of foreign trade:
 loan, gifts or grants and technicalexport, import and re-export trade.
 assistance. 
3The mode of payment of foreign aid is ofThe mode of payment in foreign trade is
 two type:either by foreign currency or by domestic
 a) Financial and physicalcurrency.
 b) Conditional or non-conditional. 
   
4Foreign aid can help to deal with marketForeign trade plays a vital role in the
 failure and capital shortage.reduction of poverty.
   
5Mostly, the developing countries areAll the countries over the world can be
 benefited by foreign aid.benefited by foreign trade.
   
6Foreign aid does not gives us theForeign trade gives us the opportunity to
 opportunity to consume foreignconsume foreign product and introduces
 product.with new market.
7The source of foreign aid is friendlyForeign trade happens between two
 countries, regional institutions like ADB,countries.
 EU and international institution like WB, 
 UNDP etc. 
8Foreign aid aims at balanced regionalForeign trade aims to increase the
 development.amount of export.
   
9Foreign aid takes place for helping in theForeign trade basically takes place for
 development process of developingmutual satisfaction of wants and utilities
 countries.of resources.
10If the aid given is concerned withThere is no such possibilities in foreign
 unproductive fields or old technology, ittrade.
 will have the effect of increasing 
 inflation in the country.

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