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Distinguish home trade and foreign trade.

Distinguish home trade and foreign trade.

Buying and selling of goods and services between two or more countries is termed as foreign trade. It involves exchange of goods and services between two parties who have different citizenship status. The process of buying and selling of goods and services between parties within the national boundaries of a country is called home trade. A home trade may be a local, state and inter-state trade. The following differences between the home trade and foreign trade can be drawn:

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Home Trade:

  • The trade is conducted within the boundaries of a country.
  • It can be carried on relatively more easily than foreign trade because it does not involve a lot of complexities.
  • The transaction is carried on with the currency of one country.
  • Most of the sales and purchases are made in small lots.
  • Home trade is free from any restrictions.

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Foreign Trade:

  • This trade goes beyond the geographical boundaries of the country.
  • It is not so easy to conduct foreign trade because it involves a lot of complexities.
  • It involves currencies of two countries because foreign trade takes place between two or more countries.
  • Most of the sales and purchases are made in large bulks.
  • Foreign trade is not free from restrictions because certain restrictions are imposed by the Central Govt.
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