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There are two kinds of risks involved in the foreign trade. These risks can be categorized into Economic risks and Political risks.
Economic risks are the risks which are caused because of the economic factors like insolvency of the buyers in the economy. This risk also involves the risk of non-acceptance, exchange rate or currency risk, risk of the failure of the buyers to pay the money of due date and risk of protracted default.
Political risks involve the war risks and risk of cancellation and renewal of the license of export and import. These risks also include the transfer risk, influence of the political parties, risk of surrendering political sovereignty and risk of confiscation of importer’s companies.
Economic risks are the risks which are caused because of the economic factors like insolvency of the buyers in the economy. This risk also involves the risk of non-acceptance, exchange rate or currency risk, risk of the failure of the buyers to pay the money of due date and risk of protracted default.
Political risks involve the war risks and risk of cancellation and renewal of the license of export and import. These risks also include the transfer risk, influence of the political parties, risk of surrendering political sovereignty and risk of confiscation of importer’s companies.
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