Q.What is meant by internal trade?

Internal trade means trade that is carried on within a nation's own borders. Whenever a product is bought from an individual or an establishment located inside the country, it counts as internal trade.

• No customs or import duty is charged, because the goods are domestically produced and meant for domestic consumption.
• Payment is normally made in the country's own legal tender (its currency).
• Everyday examples: a neighbourhood provisions shop, a departmental store or shopping mall, a door-to-door salesperson, or goods bought at an exhibition.

The idea of trade first. Trade means the buying and selling of goods and services with the aim of earning a profit. Because no individual and no country can produce everything it needs on its own, each producer concentrates on what it is best suited to make and exchanges the surplus with others. Trade is what makes this exchange possible.

Two broad kinds of trade by location of buyers and sellers:

• Internal trade — trade that takes place within a country.
• External trade — trade carried on between two or more countries.

Meaning of internal trade. Internal trade is the buying and selling of goods and services within the boundaries of a nation. Whenever a product is bought from a person or an establishment located inside the country, the transaction is internal trade — whether it is a neighbourhood provisions shop, a central market, a departmental store or mall, a door-to-door salesperson, or goods bought at an exhibition.

Key features:

• No customs or import duty — the goods are part of domestic production and are meant for domestic consumption, so no import duty applies.
• Payment in home currency — settlement is normally made in the country's legal tender, or in any other acceptable currency.
• All kinds of markets co-exist — from a street vendor selling vegetables, to branded retail shops, to outlets carrying imported and multinational brands; buyers choose different shops depending on whether they need daily items or specialised goods.
• Middlemen link producers to consumers — goods reach shops from manufacturers through intermediaries, without whom distribution would break down.

Two broad categories: wholesale trade (buying and selling in large quantities for resale or intermediate use) and retail trade (selling in small quantities to ultimate consumers).

Aim of internal trade: to distribute goods within the nation equitably, speedily and at reasonable cost.