Balance of trade: The term “balance of trade” denotes the difference between the exports and imports of goods in a country. Balance of trade refers to the visible items only. It is the difference between the value of merchandise (goods) exports and imports.

BOT is also known as ‘Balance of Visible Trade’ or ‘Trade Balance’.

Balance of Trade = Export of visible goods – Import of visible goods.

BOT can be surplus or deficit:

  • Surplus BOT: If a country exports more than what it imports, then the BOT is said to be in surplus that is favourable for the country.
  • Deficit BOT: If import of goods exceeds the export of goods, then the country is said to have a deficit BOT that is unfavourable for the country.

Difference between BOT & BOP.

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