Suggest a new Definition
Proposed definitions will be considered for inclusion in the Economictimes.com
Economy
- PREV DEFINITIONTender periodTender period gives members of the contract the flexibility to make decisions till the time the contract expires.Read More
- NEXT DEFINITIONTrade UnionLabour unions or trade unions are organizations formed by workers from related fields that work for the common interest of its members.Read More
What is 'Trade'
Trade
Long ago before the advent of money, do you wonder how people got their things? Well, they had a system in place called the barter system where if a person wants something but has another thing to give, he would find a person who has the item desired while requiring the item being offered.
Thus, this collective need is what leads a person to swap their items in hand to fulfill both of their requirements. This is considered an act of trade.
What is Trade?
In simple terms, trade is basically an exchange, voluntary in nature between two parties in requirement of each other’s resources i.e. goods and services.
This system is based purely on the concept of need, having a sort of symbiotic relationship in which both benefit each other. In financial terms, trade basically refers to the sale and purchase of assets and securities between two consensual sides.
Trade Definition
The definition of trade can be simplified in a single sentence, the fulfillment of desires by two individuals or groups via the swapping of their respective material goods and services.
Trade Importance
Trade is a practice going on for centuries with its own variations and techniques. With the old barter system as mentioned earlier, the trade saw the problem that not everyone had something of desire to give in place of obtaining something, so the solution to this problem was the creation of money, in other words, a common desirable item which can be traded in place of anything for a mutually decided monetary value.
And even money has seen its fair share of design changes, from precious metals to standardized coins to cash and now in form of the new cryptocurrency or digital currency.
Not only that, trade even provides some important benefits straight off the bat. The first one is the economic growth as trade leads to an exchange of cultures and opportunities leading to strives in development. Also, it puts remote locations on the map with global recognition for each place’s strengths along with its shortcomings leading to bustling civilizations followed by betterment.
Lastly, it even improves the performance of a country in financial aspects by giving job opportunities to people and taxes to the government which will drastically improve the country’s financial standings and incomes.
Types of Trade
Trade can be ascribed to two types:
Domestic Trade
This type of trade can further be classified into two types as well:
Wholesale Trade
This type of trade is carried on by a wholesaler who is basically the middle man between retailers and producers. The producer sells his products in hefty quantities to the wholesale trader and in turn, the wholesaler sells it to the retailer which goes on to be sold to customers. This trade is practiced widely in the majority of shops
Retail Trade
Now the retail trade is carried on by a retailer who is basically the middle man between wholesalers and customers. The wholesaler sells his products in hefty quantities to the retail trader and in turn, the retailer sells them to the customers for their use. This trade acts as the second link in the journey of a finished product from the producer to the customer.
Foreign Trade
This type of trade can be classified into two types as well:
Import Trade
This type of trade is basically the transportation of goods to one’s home country, in other words, being on the receiving end of the trade between two countries. These trades require the home country to pay for the goods.
Export Trade
This type of trade is basically the transportation of goods from one’s home country, in other words, being on the giving end of the trade between two countries. These trades require the home country to charge for the goods.
Trade Advantages
A few major advantages of trade are:
Trade Disadvantages
A few major disadvantages of trade are:
What is trade according to the dictionary?
The dictionary meaning of the word trade is the business involving selling and buying of items or goods and services.
What are the types of trade?
What are the examples of trade?
There are two major types of trade both of which have two subparts as well:
Disclaimer: This content is authored by an external agency. The views expressed here are that of the respective authors/ entities and do not represent the views of Economic Times (ET). ET does not guarantee, vouch for or endorse any of its contents nor is responsible for them in any manner whatsoever. Please take all steps necessary to ascertain that any information and content provided is correct, updated and verified. ET hereby disclaims any and all warranties, express or implied, relating to the report and any content therein.
Long ago before the advent of money, do you wonder how people got their things? Well, they had a system in place called the barter system where if a person wants something but has another thing to give, he would find a person who has the item desired while requiring the item being offered.
Thus, this collective need is what leads a person to swap their items in hand to fulfill both of their requirements. This is considered an act of trade.
What is Trade?
In simple terms, trade is basically an exchange, voluntary in nature between two parties in requirement of each other’s resources i.e. goods and services.
This system is based purely on the concept of need, having a sort of symbiotic relationship in which both benefit each other. In financial terms, trade basically refers to the sale and purchase of assets and securities between two consensual sides.
Trade Definition
The definition of trade can be simplified in a single sentence, the fulfillment of desires by two individuals or groups via the swapping of their respective material goods and services.
Trade Importance
Trade is a practice going on for centuries with its own variations and techniques. With the old barter system as mentioned earlier, the trade saw the problem that not everyone had something of desire to give in place of obtaining something, so the solution to this problem was the creation of money, in other words, a common desirable item which can be traded in place of anything for a mutually decided monetary value.
And even money has seen its fair share of design changes, from precious metals to standardized coins to cash and now in form of the new cryptocurrency or digital currency.
Not only that, trade even provides some important benefits straight off the bat. The first one is the economic growth as trade leads to an exchange of cultures and opportunities leading to strives in development. Also, it puts remote locations on the map with global recognition for each place’s strengths along with its shortcomings leading to bustling civilizations followed by betterment.
Lastly, it even improves the performance of a country in financial aspects by giving job opportunities to people and taxes to the government which will drastically improve the country’s financial standings and incomes.
Types of Trade
Trade can be ascribed to two types:
Domestic Trade
This type of trade can further be classified into two types as well:
Wholesale Trade
This type of trade is carried on by a wholesaler who is basically the middle man between retailers and producers. The producer sells his products in hefty quantities to the wholesale trader and in turn, the wholesaler sells it to the retailer which goes on to be sold to customers. This trade is practiced widely in the majority of shops
Retail Trade
Now the retail trade is carried on by a retailer who is basically the middle man between wholesalers and customers. The wholesaler sells his products in hefty quantities to the retail trader and in turn, the retailer sells them to the customers for their use. This trade acts as the second link in the journey of a finished product from the producer to the customer.
Foreign Trade
This type of trade can be classified into two types as well:
Import Trade
This type of trade is basically the transportation of goods to one’s home country, in other words, being on the receiving end of the trade between two countries. These trades require the home country to pay for the goods.
Export Trade
This type of trade is basically the transportation of goods from one’s home country, in other words, being on the giving end of the trade between two countries. These trades require the home country to charge for the goods.
Trade Advantages
A few major advantages of trade are:
- Efficiency Increase
- Natural Resources are Maximum Utilization
- Development of Sympathies and Common Interests among countries
- Development of Large-Scale Production
Trade Disadvantages
A few major disadvantages of trade are:
- Job Insecurity
- Developed Economy Dependence
- Monopoly creations
- Influence on Political Decisions
What is trade according to the dictionary?
The dictionary meaning of the word trade is the business involving selling and buying of items or goods and services.
What are the types of trade?
What are the examples of trade?
There are two major types of trade both of which have two subparts as well:
- Domestic trade
- Wholesale trade
- Retail trade
- Foreign trade
- Import trade
- Export trade
Disclaimer: This content is authored by an external agency. The views expressed here are that of the respective authors/ entities and do not represent the views of Economic Times (ET). ET does not guarantee, vouch for or endorse any of its contents nor is responsible for them in any manner whatsoever. Please take all steps necessary to ascertain that any information and content provided is correct, updated and verified. ET hereby disclaims any and all warranties, express or implied, relating to the report and any content therein.
- PREV DEFINITIONTender periodTender period gives members of the contract the flexibility to make decisions till the time the contract expires.Read More
- NEXT DEFINITIONTrade UnionLabour unions or trade unions are organizations formed by workers from related fields that work for the common interest of its members.Read More
Related News
Looking at setting up centre for negotiations on FTAs, other biz deals: Comm SecyThe commerce ministry plans to establish a center for negotiations to enhance skills in areas like free trade agreements and business deals, Commerce Secretary Sunil Barthwal announced on Tuesday. Speaking at the Indian Institute of Foreign Trade (IIFT), Barthwal emphasized the importance of negotiation skills and indicated that the center will also develop these skills among IIFT students. The initiative aims to improve IIFT's ranking and foster industry interaction. Barthwal highlighted sectors with significant export potential, such as pharmaceuticals and textiles, and underscored the crucial role of international business and business analytics in the global economy.
Raise the stakes of BIMSTEC markedlyThe Bimstec foreign ministers' retreat in New Delhi aimed to create an actionable roadmap for the seven member countries, including India, Sri Lanka, Bangladesh, Myanmar, Thailand, Nepal, and Bhutan. India must lead by leveraging its economy and partner strengths. Trade among these seven economies has grown, but remains low compared to intra-Asean trade.
Piyush Goyal meets investors, WTO DG on Switzerland visitMinister Piyush Goyal discussed the EFTA Trade Agreement implementation and investment in India with Zurich investors. EFTA nations—comprising Iceland, Liechtenstein, Norway, and Switzerland—committed $100 billion over 15 years, with reduced duties on Swiss watches, chocolates, and diamonds. Goyal met MSC Cargo and Zurich Airport officials, including Josef Felder, to collaborate on airport infrastructure and ancillary air services. Talks with WTO Director General Ngozi Okonjo-Iweala addressed ongoing negotiations, progress since the 13th Ministerial Conference, and fair, free, and equitable trade. These investments aim to support India's growth.
Piyush Goyal in Switzerland to advance EFTA's $100 billion investment in IndiaUnion Commerce and Industry Minister Piyush Goyal discussed ongoing WTO negotiations with Director General Ngozi Okonjo-Iweala in Zurich. Goyal's visit focused on advancing India's trade interests under the new India-EFTA free trade agreement, promoting collaborations with global firms like MSC Cargo, and engaging with the Indian diaspora to strengthen Indo-Swiss ties and economic growth.
China warns NATO against 'provoking confrontation' over Russia tiesNATO leaders said in a declaration from their summit in Washington on Wednesday that China had "become a decisive enabler of Russia's war against Ukraine". It said Beijing's "so-called 'no limits' partnership" and "large-scale support for Russia's defence industrial base" were of "profound concern".
Piyush Goyal to visit Switzerland to take forward EFTA commitmentsCommerce and Industry Minister Piyush Goyal announced Wednesday that the European Free Trade Association (EFTA) is eager to invest in India, urging the domestic industry to seize this opportunity. Goyal, set to visit Switzerland on Sunday to advance EFTA commitments, emphasized that the $100 billion commitment is for foreign direct investments, not portfolio investments. EFTA includes Iceland, Liechtenstein, Norway, and Switzerland.
Bandhan Bank launches products to facilitate international tradeMD & CEO of Bandhan Bank Chandra Shekhar Ghosh said "When we started as a universal bank, we were committed to provide banking solutions to address the needs of all the customers. The trade products are in line with that vision".
Government change in UK won't impact proposed FTAThe Labour Party gained a landslide majority in Thursday's parliamentary elections and dealt a bruising defeat to incumbent Rishi Sunak's Conservative Party. "Smooth transition of current talks will take place as the Labour Party has shown support to the trade deal with India," said Sachin Chaturvedi, Director General, Research and Information System for Developing Countries. The Labour Party holds a different position on social service payments and totalisation issues, he said, adding that this could be an arena of discussion in upcoming rounds of talks.
Prioritising India-UK ties, FTA in focus under new PM Keir StarmerThe India-UK FTA talks began in January 2022 but were stalled in the 14th round as both countries stepped into their general election cycles this year. India saw the new government in the first week and on Friday, it was the UK's. "There is no question in my mind that India will continue to be important for the new Labour government," said Rahul Roy-Chaudhury, Senior Fellow at the International Institute for Strategic Studies (IISS).
India must reflect & implement essential reforms to strengthen the arbitration processThe recent finance ministry notification in India has raised concerns by discouraging automatic arbitration clauses in procurement contracts. The move aims to address the unsatisfactory experience of the Government of India (GoI) in arbitration and promote mediation or court resolution for disputes. This decision has sparked a debate on the effectiveness of alternative dispute resolution methods and their impact on business dealings, particularly with global companies.
Load More
