Interrelationship Among Industry, Commerce and Trade

Industry, commerce and trade are not three separate, unconnected activities — they are three interdependent links in a single chain that begins with production and ends with consumption, and this interrelationship is a favourite essay topic in the Andhra Pradesh Board of Intermediate Education commerce examination.

Industry is the starting point. Primary industry extracts or produces raw materials from nature, and secondary industry converts those raw materials into finished or semi-finished goods. Without industry, there would simply be no goods for anyone to buy or sell — commerce and trade would have nothing to work with.

Commerce is the connecting link. Once goods are produced, they must travel from the factory or farm to the person who ultimately wants to consume them. Commerce — made up of trade plus the auxiliaries to trade studied above — performs exactly this function. It removes the hindrances of person, place, time, risk, finance and information that would otherwise keep industry's output from ever reaching the consumer.

Trade is the core activity within commerce. It is the actual act of buying and selling — the transfer of ownership of goods from the seller to the buyer, whether that happens as wholesale trade, retail trade, or import-export trade across national borders. …