Domestic vs International Trade

1902 Words Apr 15th, 2013 8 Pages
Domestic Vs International Trade

Mohammad Tariqul Islam

Domestic Trade:

Trade among parties in the same country.

Domestic trade is the exchange of goods, services, or both within the confines of a national territory. They are always aimed at a single market. It always deal with only one set of competitive, economic, and market issues. The trading is always with a single set of customers all the time, though the company may have several segments in a market. Finally local trade or home trade or Domestic trade may be sub-divided into Wholesale trade, and Retail trade.

International Trade:

Trade among parties residing in different countries.

International trade is the exchange of capital, goods, and services across international
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These factors of production do not move with such freedom among different countries due to differences in culture, climate, language, customs and political restrictions imposed by regulatory authorities. This immobility gives rise to wage and interest differentials among countries.

• Different currency system introduces additional cost and risk in international trade as the value of currencies is constantly subject to variations.

• As long distances involved transport costs for international transactions are higher than for domestic trades.

Home trade is called domestic trade in some countries. These are the differences as seen by me.
1. For home trades, payments could be made in home currency only. Foreign trades are to be paid invariably in convertible currencies.
2. Home trades generally have no restrictions of movement within the country. In international trade, there are restrictions as to movement of specific goods to specified countries.
3. Home trades have taxes levied by the Government and local bodies. International trades have levies called customs duties. These invariably go to the Federal Government.
4. Documents for domestic trades are comparatively simple and easy to understand and follow. Foreign trades have a different set of documents which must be filed in every case.
5. Insurance of consignments sent on foreign trade are compulsory; in home trade it is optional.
6. Usually,

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