Import refers to purchase of goods by the domestic country from the foreign country. Imports are done because of the following reasons:
1. The goods imported are not manufactured in the domestic country and thus are not available to the consumers.
2. The goods produced domestically are available at a higher prices than those available by imports.
3. The choice in the market is less and thus to overcome the barrier of monopoly, imports are adopted.
Exports refers to selling the goods by the domestic country to the foreign country. A country exports due to following reasons
1. There is surplus production in the domestic country so goods are sold to the foreign countries.
2. The domestic country wants to earn foreign exchange so it indulges into exports.
3. Exporting a good way to enter into international business.
The excess of imports over exports leads to trade deficit and vice versa.