eds in our day-today life. We buy various things to satisfy these wants. When we buy them we create a demand for them. To fulfil the demand for these products, the production of these goods is carried out. The producer supplies these goods. In other words he sells them to wholesale trader. Thus, the buying and selling of goods is done to fulfil each others’ needs. These who purchase are the consumers of the goods. The producer produces and the sellers sell the goods. Buyers and sellers buy and sell the goods, respectively. This is called trade

Trade is buying and selling of goods and services often in exchange of money.

We have various needs in our day-today life. We buy various things to satisfy these wants. When we buy them we create a demand for them. To fulfil the demand for these products, the production of these goods is carried out. The producer supplies these goods. In other words he sells them to wholesale trader. Thus, the buying and selling of goods is done to fulfil each others’ needs. These who purchase are the consumers of the goods. The producer produces and the sellers sell the goods. Buyers and sellers buy and sell the goods, respectively. This is called trade.

Trade is an age-old concept. In ancient and medieval periods, trade was done through the barter system. In this there was an exchange of goods with other goods. Grains were exchanged in lieu of work done or oil, salt, honey and milk were exchanged for grains. There was no currency used in this trade. Even today we see traders who exchange utensils in lieu of old clothes but this creates problems of estimating a proper price of commodities. Earlier too such problems were encountered. As a result, the use of currency started. Today, in this modern age, trade is carried out with the help of currency only but barter system is still prevalent to a small extent in remote areas amongst the tribal people.

                          TYPES OF TRADE

depending on the                         on the basis of 

quality of goods                            extent of trade 

                                                         of trade region

Retail        Wholesale

trade             trade            Domestic     International

                                              trade                trade

Depending on the quality of goods there are two types of trade wholesale and retail trade.

REATAIL TRADE:

WHOLESALE MARKET:

Traders buy commodities on a large scale directly brought from the producers. The commodities are also sold on a large scale to retail traders. This is called wholesale trading. Wholesale traders buy goods on a large scale from industrialists, farmers, etc. For example, the orchard owners of mangoes or oranges sell their entire production to wholesale traders

The buying and selling of goods happens at various levels. On that basis, trade can be divided into local, regional, national and international trade.

DOMESTIC TRADE: Domestic trade, also known as internal trade. It can also refer to the legal exchange of wildlife within a country. 

Examples of domestic trade:

This trade takes place between different regions within the same country. The size of the country, diversity, distribution and availability of natural resources affect the internal trade within the country. The sizeof population, transport and communication services, the living standard of the people, marketing system lead to large-scale internal trade. In India, factors like diversity in geographical conditions and high population also affect the domestic trade. A country’s development is dependent on the extent of the domestic trade. If there is a good economic growth, then trade will also be more. Thus, there is a positive relation between economic growth and trade.

INTERNATIONAL TRADE:

 International trade means the exchange of goods and services of one country with other countries. Some countries produce specific products in excess, for example, crude oil in Saudi Arabia, Kuwait and wheat production in the USA, Canada, etc. These products are sent to countries having demand for those goods. This leads to the beginning of international trade. When international trade takes place between two countries it is bilateral trade. When it occurs between more than two countries it is called multilateral trade.