Unit 1: Trade and Commerce
1. Nature and Scope of Trade and Commerce
- Trade refers to the buying and selling of goods and services with the aim of earning profit.
- Commerce is a broader term that includes all activities facilitating trade, such as transportation,
banking, insurance, advertising, warehousing, etc.
Nature:
- Involves exchange of goods and services.
- Promotes specialization and division of labor.
- Aims at economic development and value creation.
Scope:
- Encompasses both internal and international trade.
- Covers a wide network of intermediaries and support services.
- Extends to logistics, marketing, legal regulations, and e-commerce.
2. Significance of Trade and Commerce
- Economic Development: Trade boosts production and income levels.
- Employment Generation: Creates jobs in retail, logistics, transport, etc.
- Market Expansion: Helps producers reach wider consumer bases.
- Resource Distribution: Ensures availability of goods in various regions.
- Foreign Exchange Earnings: International trade enhances national income through exports.
3. Types of Trade and Business
a. Trade Types:
- Internal Trade:
- Wholesale Trade: Sale in large quantities to retailers.
- Retail Trade: Sale in small quantities to consumers.
- External Trade (International):
- Import Trade: Bringing goods into a country.
- Export Trade: Selling goods to foreign countries.
- Entrepot Trade: Importing goods for re-export.
b. Types of Business:
- Manufacturing: Production of goods.
- Service Business: Providing services (banking, insurance, etc.)
- Merchandising: Buying and selling of finished goods.
4. Trade and Commerce in Ancient India
- Flourished Trade Routes: Both land and sea (Silk Route, Spice Route).
- Urban Centers: Harappa, Mohenjo-Daro, Pataliputra were major trade centers.
- Coinage and Barter: Use of coins like punch-marked coins during Mauryan period.
- Guilds (Shrenis): Merchant associations regulated trade practices.
5. Trade and Commerce in Pre-independence India
- Colonial Policies: British policies favored raw material export and import of British goods.
- Destruction of Local Industries: Indian handicrafts declined due to industrial imports.
- Limited Industrial Growth: Industrialization was restricted to jute, cotton, and tea.
- Transportation and Infrastructure: Developed mainly to serve British interests.
6. Trade and Commerce in Post-independence India
- Planned Development: Five-year plans focused on self-sufficiency and industrialization.
- Liberalization (1991): Opened Indian markets to global competition.
- Digital Commerce: Growth of e-commerce platforms and digital payment systems.
- Start-up Culture: Emergence of entrepreneurship and MSMEs.
7. Growth and Development in Different Sectors
a. Primary Sector:
- Involves extraction of natural resources (agriculture, fishing, mining).
- Major employer in India, especially rural areas.
b. Secondary Sector:
- Includes manufacturing and industry.
- Converts raw materials into finished goods.
c. Tertiary Sector:
- Involves services like banking, transport, communication, education, healthcare.
- Fastest growing sector in post-liberalization era.
