Internal Trade

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8 Internal Trade

8.1 Introduction
In the lesson on trade you have already been made familiar with the distinction between internal and external trade i.e. between home trade and foreign trade. You will recall that internal trade consists of exchange of goods and services between people living within the same country. In this lesson you will learn about internal trade in detail.

8.2 Objectives
After studying this lesson you will be able to • • • • • • • • recall the meaning of Internal Trade; explain the features and importance of Internal Trade; enumerate the types of internal trade with the help of charts/ diagrams; state the meaning and characteristics of wholesale trade and retail trade; distinguish between wholesale trade and retail trade; enumerate the services of a wholesaler and a retailer; enumerate and explain the various types of retailers; differentiate between multiple shops and departmental store;

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• •

state the conditions necessary for the success of a mail-order business; enumerate the characteristics of a Super Bazar.

8.3 Internal Trade: Meaning, Features and Importance
Meaning of Internal Trade
Internal trade is the sum total of activities which brings the producers and consumers within the same country together. It involves distribution of goods and services from the point of production to the point of consumption within the boundries of the same country.

Features and importance
The main features of Internal Trade are as follows: 1. 2. 3. 4. 5. 6. The buying and selling of goods takes place within the boundaries of the same country. The medium of exchange is the currency of the country. There are minimum legal and administrative formalities involved in organising internal trade. It involves transactions between producers, consumers and the middlemen. It consists of a distribution network of middlemen and agencies engaged in exchange of goods and services. Generally there is minimum interaction between the producers and ultimate consumers.

The importance of Internal Trade is as given : 1. It facilitates the exchange of goods and services between the producers and the ultimate consumers within the country. It helps in improving the standard of living and quality of the life of the people. It helps the growth of the industry in the country by facilitating



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the availability of raw materials and other inputs, and distribution of the finished products. 4. 5. It provides opportunity for the people to get employment in trading organisations as well as to be self employed as trader. It also helps in the growth of agriculture. Agriculture products are sold to consumers across the country and the seeds, fertilizers, tools and equipment which are used by farmers are made available to them only through the services of the traders. It promotes foreign trade. It is not always possible to sell and buy from other countries directly. It is generally done through the agencies involved in internal trade. Internal trade may be divided into several types which are shown in the chart below.


Internal Trade Wholesale Trade Small Scale Retail Trade Wandering Trade Fixed Shops/Stalls General stores Hawkers Provision Stores Stationery Shops Chemists Shops Consumer Co-operative Stores Departmental Stores Super Bazars Mail Order Business Specialised trade Retail Trade Large Scale Retail Trade


Multiple Shops

Door to door Salesmen

Retailing in Weekly Bazars

Hardware Shops

Other(Tailors, Repair

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Shops, etc.)

Intext Questions 8.1
Following are the statements relating to internal trade. Write which of these show its feature and which relate to its significance. (i) The buying and selling takes place within the boundaries of a country. The buyer comes to know about new products which help in raising his standard of living. It gives an opportunity of self-employment The...
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