AI-generated practice question — model-generated for extra practice, not a previous-year CBSE board question.
Foreign Trade refers to the exchange of goods and services between countries. It allows producers to sell in foreign markets and buyers to import goods from other countries, thus integrating markets.
Foreign Investment refers to MNCs investing money to set up factories, offices, or production units in another country to expand their business operations.
The examiner expects a clear point-by-point distinction. Note that foreign trade = movement of goods/services across borders, while foreign investment = movement of capital/MNC investment across borders. Both are channels of globalisation but differ in what moves between countries. One line each with a contrast is ideal for 2 marks.
Source: Chapter 4 — Foreign Trade and Integration of Markets; What is Globalisation?