Question

State the difference between Internal and International Trade.

Answer 1

Points of difference	Internal trade	International trade
Meaning	Trade occurring within the boundaries of a country is called internal trade. Example: trade between Gujarat and other states.	Trade occurring between two or more countries i.e. outside the border of a country is called foreign trade or international trade. Example: Trade between India and other countries.
Currency	Since a common currency exists in entire country trade becomes easier.	Currencies vary with countries which poses several problems.
Laws	Trade laws are similar in entire country.	Trade laws are different in different countries.
Problem of language	Language does not create much problem in trade.	Language becomes a barrier in trade especially while trading with backward and rigid countries.
Control of government	There are less government controls.	There are several government controls.
Proportion of risk	Risk is less.	Risk is very high.
Distance	Distance is short as trade occurs within country.	Distance is very large as trade may take place between countries situated anywhere in the world.
Insurance	Insurance of goods is not compulsory.	Insurance of goods is compulsory.
Payment of excise duty	Excise duty is less and also it is easy to pay.	Process of paying excise is complicated and also it is too high.
Market	Market is limited within the country.	One can extend market to whole world.