·
Meaning: Home trade is buying and selling goods within
the country, while foreign trade means buying and selling goods between
countries.
·
Distance: The distance involved in foreign trade is
much greater than the distance involved in home trade. This means that air or
sea transport has to be arranged in foreign trade, whereas road and rail
transport can be used in home trade.
·
Trade
Barriers: In foreign
trade, there are trade barriers like customs duties, quotas and embargoes,
levied on imports and some exports. There are no such trade barriers in home
trade.
·
Types: Home trade includes wholesaling and retailing,
whereas foreign trade includes importing, exporting and entrepot trade.
·
Languages: In home trade, there would be no difficulty
regarding language, as the same language is spoken. But in foreign trade,
translators would be required as each country speaks a different language.
·
Currencies: In home trade, the problem of exchange rate would
not arise, as the same currency is used for payments. But in foreign trade,
each country uses a different currency. So the problem of exchange rate would
arise.
·
Technical
Requirements: In
home trade, the same technical specifications for goods are required. But in
foreign trade, each country has a different technical specification. So
manufacturers would have to produce goods according to different technical
specifications.
·
Methods
of Payment: In home trade
cheques are the most favored means of payment. In foreign trade, bills of
exchange, letters of credit and cable transfers are the most suitable means of
payment.
·
Cultural
Differences and Requirements:
In home trade, there is not much need for market research as there are no
differences in taste and fashion. But in foreign trade, each country has a
different culture, taste and fashion. So first market research has to be
carried out and then goods exported accordingly.
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ReplyDeleteAre you looking for the differences between home trade and foreign trade so you have come to the right article for differentiating home and foreign trade? Here you can read it in detail
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