Question

What is meant by internal trade?

Answer 1

Internal trade refers to the process of exchanging goods and services within the national boundaries of a country. In other words, the buying and selling of goods and services within the domestic territory of a country is known as internal trade. Purchases of goods from a local shop, a mall or an exhibition are all examples of internal trade. The government does not levy customs or import duties on goods and services that are produced within the country for meeting the domestic demand.

Internal trade can be classified into the following two categories:

(a) Wholesale trade: It refers to the buying and selling of goods in bulk−that is, the exchange of large quantities of goods meant for resale in local markets.

(b) Retail trade: It refers to the buying and selling of goods in small quantities for final consumption.