What is Internal Trade? | Free Economic Blogs

What is Internal Trade?

What is Internal Trade?
What is Internal Trade?

What is Internal Trade?

You know that the goods produced in a country may be sold within the country or outside the country. When buying and selling of goods and services take place within the geographical boundaries of a country, it is referred to as internal trade. It may take place between buyers and sellers in the same locality, village, town, or city; or maybe in different states, but definitely within the same country. Internal trade is also called domestic trade or home trade.

In Internal Trade whether the products are purchased from a neighborhood shop in a locality or a central market or a departmental store or a mall or even from any door-to-door salesperson or from an exhibition, all
these are examples of internal trade as the goods are purchased from an individual or establishment within a
country. No custom duty or import duty is levied on such trade as goods are part of domestic production and
are meant for domestic consumption.

Generally, payment has to be made in the legal tender of the country or any other acceptable currency. Internal trade can be classified into two broad categories viz.,
(i) wholesale trade and (ii) retail trade.

Features of Internal Trade

(a) The buying and selling of goods take place within the boundaries of the same country.
(b) Payment for goods and services is made in the currency of the home country.
(c) It involves transactions between the producers, consumers and the middlemen.
(d) It consists of a distribution network of middlemen and agencies engaged in exchange of goods and services.

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