Types of Trade in Economics

Trade that takes place within the boundaries of a country is called Internal or Domestic Trade.

It has two sub-types:

• Wholesale Trade: The trader (wholesaler) buys goods in very large quantities directly from the manufacturer and sells them in smaller quantities to retailers.
• Retail Trade: The retailer buys goods from the wholesaler and sells them in small quantities directly to the final consumer. Your local grocery shop (kirana store) is a retail trade example.

Trade that takes place between two or more different countries is called External or Foreign Trade.

It has three sub-types:

• Import Trade: Buying goods from a foreign country to bring into your own country. (e.g., India imports crude oil from Saudi Arabia.)
• Export Trade: Selling goods produced in your country to a foreign country. (e.g., India exports software services and spices globally.)
• Entrepot Trade (Re-export): Importing goods from one country and then re-exporting them to a third country. (e.g., Singapore is famous for Entrepot trade.)