TRADE AND AIDS TO TRADE

Trade and Aids to Trade

Types of Trade

Home Trade is buying and selling of goods and services within international boundaries.
Foreign Trade is buying and selling of goods and services across the globe.

Aids to Trade

Services which are required to facilitate trade.

Aids to Trade Function
1. Banking Provides Finance and Services.
2. Transport Without means of transportation it is impossible to trade.
3. Communication To transmit and receive information quickly.
4. Insurance Absorbs some of the risks in production and trade.
5. Warehousing Provides storage facilities.
6. Advertisement Inform customers about products.

Comparison of Home Trade and Foreign Trade

Similarities between Home Trade and Foreign Trade

Buying and selling of goods for making profit.
Serve mankind by satisfying needs and wants.
Requires aids to trade.
Require surplus to be created.
Work on the principle of specialization.

Dissimilarities between Home Trade and Foreign Trade
HOME TRADE
1. Done within national boundaries.
2. Same currency is involved.
3. Same units of measurements.
4. Same government policies.
5. No taxes are involved.
6. Simple Documents.
7. Same culture and language
8. Mode of Payment is cash, cheque etc.
9. Mode of transportation is land or rail.
10. Small and big quantities are involved.

FOREIGN TRADE
Foreign Trade
. Done across the globe.
2. Different currencies are involved.
3. Different units of measurement.
4. Different government policies.
5. Import/Export taxes are involved.
6. Complex Documents.
7. Different culture and languages.
8. Mode of payment is online transfer, bill of exchange etc.
9. Mode of transportation is through sea or air.
10. Only large quantities are involved.