Q.Distinguish between Home Trade and Foreign Trade.
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Start your 14-day free trial to unlock the full solution →Home trade is buying and selling within a country; foreign trade is between countries. They differ in area, currency, documentation, restrictions, risk and mode of transport.
Meaning
Home Trade (also called internal, domestic or inland trade) is the exchange of goods and services within the geographical boundaries of a country. It includes wholesale and retail trade.
Foreign Trade (also called international or external trade) is the exchange of goods and services between two or more countries. It includes import, export and entrepot trade.
This distinction is a standard AP Inter 2nd-year Commerce previous-year question; AP's commerce syllabus aligns with the NCERT/CBSE commerce curriculum here.
Distinction between Home Trade and Foreign Trade
| Basis | Home Trade | Foreign Trade |
|---|---|---|
| Area | Carried on within the same country | Carried on between different countries |
| Currency | One common national currency | Different currencies; needs foreign exchange |
| Documents | Few documents needed | Many documents — bill of lading, letter of credit, shipping bill, certificate of origin |
| Customs/Duties | No customs duty | Customs duties and tariffs are levied |
| Restrictions | Generally free movement | Subject to quotas, licences and government restrictions |
| Transport | Mostly road and rail | Mostly sea and air, over long distances |
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