International vs Inter-Regional Trade: A Comparative Analysis
International trade involves exchanging goods between countries for profit, while inter-regional trade occurs within the same region among different areas. They differ in factors like production mobility, market conditions, and currency systems, but share similarities in trade principles and division of labor.
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Presentation Transcript
What is International Trade? International trade is concerned with the exchange of goods between one country and another. It is the movement of goods and services from one Geographical Boundary to another. It is trading with foreign countries. But it is only an extension of internal or domestic trade. The main motive behind international trade is Profit. Profit from international trade like the Profits from all trade arises because of the fact that specialization increases productivity. International trade means trade between nations with different elements of productive power.
What is Inter Regional Trade? Trade which take place in the same region among different areas is called Inter regional trade As in India Rajasthan import textile form Gujrat, In rajasthan Jaipur import Marble from Rajsamand etc.
Features of International Trade : 1. Immobility of Factors of Production 2. Heterogeneous Market 3. Different National Policies 4. State Intervention 5. Differences in Socio-economic Environment 6. Different Political Units 7. Different Currencies 8. Degree of Competition
Similarities between Inter-Regional Trade & International Trade 1. Participants in both trade have the same desire i.e. to achieve maximum gain at minimum of sacrifice. 2. The difference between the two trades is one of the degree and not of kind. 3. No area and no region of any country can produce all that is necessary for itself. 4. Immobility of factors of production give rise to both internal and international trade. Eg: Assam and Kerala greater distance, Bihar and Nepal lesser distance. 5. The fundamental principle in both is the same. 6. Both trades are due to division of labour. 7. In both trades, people specialize in producing goods in which they have greater comparative advantage.
Differences between Inter-Regional Trade & International Trade 1. Immobility of factors of production 2. Differences in production conditions 3. Natural Resources 4. Currency system differs 5. Trade and Exchange controls 6. Market knowledge 7. Barter systems 8. Difference in law 9. Different political groups 10. Cultural distinctions
