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Introduction to Internal Trade

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Internal trade includes buying and selling goods and services within the boundaries of a nation. It includes all the trade from a neighborhood shop in a locality or departmental store, mall, or central market. Any product or service that has been purchased or sold within the national boundaries of a country can be termed as internal trade. It implies that the buyer, as well as the seller of the product or service, should belong to one country. Purchase or sell of products and services online through the internet within the boundaries of a country also comes under internal trade.

There are three main constituents in internal trade i.e. Manufacturers, Wholesalers, and Retailers. Manufactures are those units that are responsible for producing goods at a large scale, wholesalers are those units that purchases goods from manufacturers in bulk, and retailers are those units that purchases goods in smaller quantity from wholesalers and further sell them directly to customers. These all are interconnected to each other.

 Internal Trade can further be classified into two categories:

1. Wholesale Trade:

Generally, products are to be distributed to a large number of customers who are located over a wide geographical area. It’s very difficult for producers of those products to reach those buyers directly. So, intermediaries are set up between producer and buyer. Wholesale Trade refers to buying and selling of goods and services in bulk quantities for resale or intermediate use. Wholesalers act as an important link between the producer and retailers. Wholesalers not only help the producers to reach a wide geographical area but also help in performing a variety of functions related to the distribution of goods.

2. Retail Trade:

Retailers are a business enterprise that is involved in selling goods and services directly to the ultimate customer. They buy goods from wholesalers in large quantities and sell them in smaller quantities to the ultimate customer. Retailers can sell goods and services personally, by telephone, or by vending machines. Products may be sold in different places as well.

Types of Retailing Trade:

1. Itinerant Retailers: The traders who do not have a fixed place to carry their trade. They keep moving from one place to another in search of potential customers.  Itinerant Retailers includes:

  • Peddlers and Hawkers
  • Market Traders
  • Street Traders(pavement vendors)
  • Cheap Jacks

2. Fixed Shop Retailers: The retail shops that have their permanent place from where they sell their merchandise are fixed shop retailers. They do not move from one place to another in search of customers. They are of two types:

(I) Fixed Shop Small Retailers:

  • General Stores
  • Specialty Shops
  • Street Stall Holder
  • Secondhand Goods Shop
  • Single Line Stores

(II) Fixed Shop Large Retailers:

  • Departmental Stores
  • Chain or Multiple Stores

3. Mail Order Houses: Such retail outlets that sell their products through the mail and no direct personal contact are called mail-order houses. The orders are taken and products are delivered through post.

4. Consumer Co-operative Stores: A consumer cooperative store can be defined as an organization that is managed, controlled, and owned by consumers themselves. These are established to cut the cost by reducing the number of middlemen who increase the cost.

5. Super Markets: A supermarket is a huge retailing business unit selling a wide variety of consumer goods. The products traded are food items and other low-priced, branded, and widely used consumer products. It is generally situated at the main shopping market of a city and offers different types of products under one roof.

6. Vending Machines: Vending machines are the newest and revolutionary item in marketing methods. Coins or plastic money is used to operate vending machines from which one can buy hot beverages, platform tickets, milk, soft drinks, chocolate, newspaper, etc. 

Role of Indian Chamber of Commerce & Industry in Promotion of Internal Trade:

The Indian Chamber of Commerce & Industry has been playing a significant role in strengthening internal trade to make it a prominent part of overall economic activity. It was formed as an association of business and industrial houses to promote as well as protect their rest and goals. Some of the major areas where the Indian Chamber of Commerce & Industry works are:

1. Transportation or Inter-state Movement of Goods: The Chamber of Commerce & Industry helps in many activities related to the movement of goods which includes registration of vehicles, surface transport policies, construction of infrastructure, etc. 

2. Octroi and Other Local Levies: Local taxes are one of the important revenue-generating elements of the local government. From time to time, The Chamber of Commerce ensures that the rate of these taxes is not so high that internal trade suffers.

3. Harmonization of Tax Structure: The Chamber of Commerce interact with Government and Various Agencies to harmonize the tax structure in different states. They try to create balance in trade by suggesting a rational structure of the taxes to the Government.

4. Marketing of Agro-Based Products and Related Issues: The Associations of Agriculturists and other Federations play a prominent role in the marketing of agriculture-based products.

5. Weights and Measures and Prevention of Duplicate Brands:  The Chamber of Commerce interact with Government to formulate laws related to Weighs and Measures and take action against those who violate rules and regulations. Through this, they try to protect the interest of the consumers as well as traders.

6. Promoting Sound Infrastructure:  The role of the Chamber of Commerce includes taking up heavy investment projects for building sound infrastructure like road, port, electricity, railways, etc.

7. Labour Legislation: A simple and flexible labour legislation is very helpful in the overall mechanism of running industries, maximizing production, and generating employment.  The Chamber of Commerce and Government are constantly interacting on issues like labor laws, retrenchment, etc. 


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Last Updated : 06 Apr, 2023
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