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Trade

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Trade

The process of buying and selling of goods and services on a market is known as trade. It is used in our

source : www.nationalreview.com Fig : Trade
source : www.nationalreview.com
Fig : Trade

daily life. All the goods and services that we find in our surroundings is the result of trade.
Trade can be classified into two types which are given below:

  1. Internal Trade
  2. External Trade
  • Internal Trade: The process of exchanging or buying and selling goods and services within the territory of a country is known as internal trade. It is done only inside the nation. For example, apple produced in Humla – Jumla is sold in Kathmandu and other different districts inside the nation.
  • External Trade: The process of exchanging or buying and selling goods and services to another country or outside the territory of a country is known as external trade. It is done outside the country. For example, the clothes of “Pashmina” made in Nepal are sold to England and other foreign countries.
    Importing and exporting take place in external trade. The process of buying goods from the foreign countries is called import and the process of selling goods to foreign countries is called export. Trade is done for the benefit or to earn income with exchanging goods and services.

Trade in Nepal

Nepal is a least developed or a developing country. The main trade of Nepal is agriculture. But, it is insufficient to earn a better income for the people. Nepal is involved more in importing goods and less in

source :www.theworldeffect.com Fig : Trade in Nepal
source :www.theworldeffect.com
Fig : Trade in Nepal

exporting goods. So, it is one of the reasons to be anunderdeveloped country. Being a landlocked country, it has no good access for importing goods. Nepalese trade is limited to India and other countries. Nepal has a good trade relationship with India only. Nepal imports machinery, textiles, electronic goods, petroleum etc. from foreign countries and exports only agro-goods like paddy, maize, timber, herbs, cardamom etc.

Diversification

Trade diversification is the process of making the trade relationship good and wider with many countries. It is one of the solutions for the trade deficit of Nepal. Nepal followed the principle of trade diversification since 2013 B.S. At that time, Nepal had started trade with third countries apart from China and India. Now, Nepal has a good trade relationship with many countries like China, India, Germany, USA, Korea, Japan and so on.

Benefits of Trade Diversification

There are various advantages of trade diversification. Some of them are given below:

  • It helps to make good trade relations with many countries.
  • It helps to import varieties of goods from foreign countries.
  • It helps to earn more foreign currency by exporting goods to other countries.
  • It may decrease the price by increasing competition for quality products.
  • Consumers can buy foreign goods and products in their local areas.



  1. The process of buying and selling of goods and services on a market is known as trade. It is used in our daily life. 
  2. The process of exchanging or buying and selling goods and services within the territory of a country is known as internal trade. It is done only inside the nation. 
  3. The process of exchanging or buying and selling goods and services to another country or outside the territory of a country is known as external trade. It is done outside the country. 
  4. The main trade of Nepal is agriculture.
  5. Trade diversification is the process of making the trade relationship good and wider with many countries. It is one of the solutions for the trade deficit of Nepal. 
.

Very Short Questions

There are various advantages of trade diversification. Some of them are given below:

  • It helps to make good trade relations with many countries.
  • It helps to import varieties of goods from foreign countries.
  • It helps to earn more foreign currency by exporting goods to other countries.
  • It may decrease the price by increasing competition for quality products.
  • Consumers can buy foreign goods and products in their local areas.

 

The process of buying goods from the foreign countries is said to be import.

The process of selling goods to foreign countries is said to be export.

China, India, Germany, USA, Korea, Japan etc. have good trade relations with Nepal.

The process of buying and selling of goods and services on a market is known as trade.

Machinery, textiles, electronic goods, petroleum etc. are the items that are imported by Nepal.

0%
  •  ________ is the process of buying and selling goods.

    Trade
    Money 
     Cash
     Gold 
  •  Nepal adopted the principal of __________ since 2013 B.S.

     develop
     trade diversification
     all of them
    underdevelop 
  •  What do you mean by import?

     All of them.
     Buying international goods.
     Buying goods from other country.
    Buying foreign goods.
  • With which country has Nepal the largest trade with?

    Franch
    Japan
    India
    China
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