internal trade and international trade both perform a big role in any country economy. support it and explain....
Answers
HΣLLΟ
HΣRΣ Iς ΥΟυR ΔПςwΣR
Trade is the defined as the exchange of goods and services between person or entity to another. The trade involves buying and selling of goods and services. Trade is the central activity in the economy. Trade not only refers to the exchange of goods and services within the country but also between two or more countries.
Trade is basically divided into two types,
1. Internal Trade
2. External trade
There are a lot of difference between internal trade and external trade
means
Internal trade refers to the trade within the borders of the country.
External Trade refers to the trade between two or more countries.
Exchange of Currencies
There is no exchange of currencies takes place in the Internal Trade because there is a same currency in the country
External Trade involves the exchange of currencies between the nations which are involved in the trade.
Restrictions on transfer of goods
Internal trade usually doesn't have any restrictions on movement inside the country
External Trade is subjected to many restrictions on transfer to certain goods to certain countries.
Transportation costs
Internal Trade generally has fewer transportation costs and risks to transfer the goods.
External Trade involves very high transportation costs and risky situations to transfer goods from one country to another
Transport Systems
Internal Trade depends upon the network and internal transport systems like roads, railways, etc.
External Trade depends upon the seaways and the airways between the countries involved in the trade
Approvals
The Internal trade involves fewer documentations and approvals from the government to transfer the goods.
External Trade involves more documentations and approvals from government and it is a long process to get approvals from government.
Volume of Trade
The volume of the trade depends upon the population of the country, demand for the product, etc
External Trade has many restrictions imposed on free entry of goods and many duties and taxes have to be paid to trade goods between countries.
Time Gap
Internal trade usually have less time gap between the goods dispatched and goods received and payment received for the consignment.
External Trade involves wide time gap between the goods dispatched from the home country and goods received by the other country.
Insurance
The goods ofinternal Trade don't carry a compulsion to have the insurance for goods in transport.
The goods which are sent to other countries by the foreign need to be insured compulsorily.
Advantage to People
The goods of internal don't carry a compulsion to have the insurance for goods in transport.
The goods which are sent to other countries by the foreign need to be insured compulsorily.
HΟPΣ Iτ'ς HΣLP FΟR ΥΟυ
internal trade and international trade both are a very effective forms of trade in an economy to generate income.
But as the question demands for its role in any country, I would like to continue distinguishing them further.
Internal trade is referred to buying and selling of goods and services within the geographical limits of a country. Due to this it has a varied aspect of growth in the country, but if compared with the international trade internal trade will come out as more suitable an d sustainable option.
In Internal trade as the goods are sold within the limits the cost of goods at the marketplace is comparatively low and and this causes the domestic producers to have an economies of scale.
Whereas, in international trade the goods to be sold are at a greater risk as 2 main aspects need to be maintained by the producers:
1) Goods should be maintained at a very cheap rates so that after the application of the customs and foreign taxes the price of the commodity can be stable in comparison with the other products.
2) Another thing need to be taken care of is the quality standards of the products. Depending on the country dealing with quality of the products is to be maintained as if not done so then it may incur huge stock loss leading to an accrued losses.
In these trade transactions the government of (domestic and international country) gets benefited with the help of taxes. But as seen taxes are not the only thing which are needed by the country coz if the country have sufficient funds but improper knowledge in its utilization then it may simply waste the amount of funds available.
But if compared on the basis of:
1) Taxes:- international trade gives more revenue through taxes to a government .
2)Commodity :- International trade also helps the country to avail international and standardized products. These products give country an opportunity to standardize there people's living condition.
At last i would like to conclude that both the trade options provide suitable distinction to their consumers in the marketplace in their products so that there respective market can grow.
International goods can be used as a great mean for a country to develop its standard of living.