This article will help you to learn about the difference between domestic trade and foreign trade.
Difference between Domestic Trade and Foreign Trade
Home or Domestic or Internal Trade
1. Meaning:
Purchase and sale of goods within a country is known as internal or home trade.
2. Different Currencies:
Home or domestic trade involves the use of only one currency, i.e., the domestic or home currency.
3. Exchange and Trade Control:
Within a country, there is a free flow of goods and services.
4. Politically Different:
Home or internal trade takes place within the same political unit.
5. Transportation Costs:
Internal or domestic trade involves less transportation cost.
6. Risk:
In home trade, the amount of risk is comparatively less.
Foreign or International Trade
1. Meaning:
Purchase from and sale of goods and services outside the country is called the international or foreign trade.
2. Different Currencies:
International trade involves the use of two different currencies, the local currency and a foreign currency.
3. Exchange and Trade Control:
There is no free flow of goods and services from one country to another.
4. Politically Different:
International or foreign trade takes place between politically different units.
5. Transportation Costs:
International trade involves comparatively greater transportation cost.
6. Risk:
In foreign trade, there is a greater risk.