termined the prosperity of the nation. However, with the advent of globalization and industrialization during 19th century, these regulations have been relaxed and thInternational trade can be broadly termed as exchange of goods and services between two countries or across two international boundaries. Trade between nations existed from ancient times. International trade often had a significant influence in determining the socio-economic, political and cultural scenario of a country.

International trade between two countries is heavily influenced by the existing bilateral relations between the nations. During the early times, international trade was strictly regulated and was under the influence of high tariffs. During this period, countries mainly adopted the policy of mercantilism where the inflow of capital determined the prosperity of the nation. However, with the advent of globalization and industrialization during 19th century, these regulations have been relaxed and the

d from ancient times. International trade often had a significant influence in determining the socio-economic, political and cultural scenario of a country.

International trade between two countries is heavily influenced by the existing bilateral relations between the nations. During the early times, international trade was strictly regulated and was under the influence of high tariffs. During this period, countries mainly adopted the policy of mercantilism where the inflow of capital determined the prosperity of the nation. However, with the advent of globalization and industrialization during 19th century, these regulations have been relaxed and th

ernational trade between two countries is heavily influenced by the existing bilateral relations between the nations. During the early times, international trade was strictly regulated and was under the influence of high tariffs. During this period, countries mainly adopted the policy of mercantilism where the inflow of capital determined the prosperity of the nation. However, with the advent of globalization and industrialization during 19th century, these regulations have been relaxed and thstrictly regulated and was under the influence of high tariffs. During this period, countries mainly adopted the policy of mercantilism where the inflow of capital determined the prosperity of the nation. However, with the advent of globalization and industrialization during 19th century, these regulations have been relaxed and thtermined the prosperity of the nation. However, with the advent of globalization and industrialization during 19th century, these regulations have been relaxed and the concept of free trade has been adopted. In this model, the trade is not regulated by any government-imposed restrictions which include taxes and tariffs. All the developed and economically powerful nations including United States, United Kingdom and the entire Europe have been the strongest advocates of this policy.

There are several theories in practice for the purpose of determining the tariffs and patterns of international trade. These include the Ricardian model, Heckscher-Ohlin model, Specific factors and the Gravity model. However, the gravity model of trade presents a more detailed analysis regarding the trading patterns around the globe. In