An import is a commodity brought into a territory, especially across a national border, from an external source. Importation and exportation are the defining financial transactions of international trade. An import in the receiving country is an export from the sending country.
In international trade, the exportation and importation of goods are limited by import quotas and mandates from custom authority. The importing and exporting countries may impose a tariff (tax) on the goods. In addition, the exportation and importation of goods are subject to trade agreements between the importing and exporting countries.
Import consists of transactions in goods and services to a resident of a country from non-residents. The exact definition of imports in national income accounts includes and excludes specific border cases. A general view of imports in national income accounts is given below.
An import of a commodity occurs when there is a change of ownership from non-resident to a resident; the does not necessarily mean that the commodity in question physically crosses the frontier. However, in specific cases, national accounts impute changes of ownership even though in legal terms no change of ownership takes place. For example, cross frontier financial leasing, cross border deliveries between affiliates of the same enterprise, commodities cross the border for significant processing to order or repaid. Also smuggled goods must be included in the import measurement.
Imports of services comprise all services rendered by non-residents to residents. In national income accounts, any direct purchases by residents outside the economic territory of a country are recorded as imports of services, therefore all expenditure by tourists in the economic boundary of another country are considered part of the imports of services. Also international flows of illegal services must be included.
Basically, there are two types of import, which include:
- Industrial and consumer goods.
- Intermediate goods and services.
Industrial goods are made up of machinery, manufacturing plants and materials, and any other commodity or component used by other industries or firms. They are based on the demand for consumer goods that they may help to produce. They are classified as either production goods or support goods. Production goods are used in the production of final consumer goods, while support goods are, in general, used as inputs or raw materials to produce consumer goods. They are derived demand because they are demanded to produce consumer products.
Consumer goods are ready for consumption and satisfaction of human wants, such as clothing or food. Consumer goods are not used in the production of other goods. They are tangible commodities that are produced to satisfy the wants of the buyer. Consumer goods are classified as durable goods, non-durable goods, or consumer services.
Durable goods have a significant lifespan of three years or more. The consumption of a durable good is spread out over time the entire life of the good, which causes demand for maintenance and upkeep. Bicycles, furniture, and cars are examples of durable consumer goods.
Non-durable goods are goods that are purchased for immediate consumption or use, and they have a lifespan that is less than three years. Beverages, food and clothing are examples of non-durable consumer goods.
Consumer services are intangible services or products that are produced and consumed at the same time. Car washes and hair cuts are good examples of consumer services.
Intermediate goods or producer goods or semi-finished products are goods, such as partly finished goods, used in the production of other goods including final goods. They are used either for resale or for further production in the same year. They are generally purchased by one by one production unit from another production unit. They also have derived demand as their demand depends on demand for final goods. The value of intermediate goods is merged with the value of final goods. In the production process, intermediate goods either become part of the final goods, or are changed beyond recognition in the process. Examples include sugar when used as an input or ingredient in other food production, steel used in the production of many other goods, such as bicycles, car engines, plant, ply wood, pipe and tube, and ancillary parts, purchases of trucks, vehicles, aircraft, etc by government for military purposes to produce defense services.