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Chapter: 11th Commerce : International Business

Differences Between Domestic Business and International Business

Differences Between Domestic Business and International Business



Domestic business Vs International business


1. Meaning

Domestic business refers to business transactions transacted within the geographical boundaries of a country

International business refers to the business transactions transacted in beyond the boundaries of a country

2. Participants in Business

People / organizations within the country participate in business activities

People/organizations outside the country participate in business activities

3. Mobility of Factor of Production

The factors of production i.e. labour,, capital, technology, material, etc., move freely within the boundaries of the country

The factors of production i.e. labour,, capital, technology, material, etc., move across the boundaries of the country.

4. Nature of Consumers

Consumers are relatively homogenous in nature in terms of culture, behavior ,taste, preferences, legal system, customs and practices, etc.,

Consumers are relatively heterogeneous in nature in terms of culture, behavior ,taste, preferences, legal system, customs and practices, etc. prevailing across the countries,

5. Business System

Domestic business is governed by the rules, laws, policies taxation system of a single country

International business is governed by rules, laws and policies ,tariffs and quotas etc., of multiple countries

6. Currency Used

Domestic business transactions are settled by local currency of a country.

International business transactions are settled by foreign currencies.

7. Mode of Transport

The goods involved in domestic business are mainly transported by roadways and railways.

The goods involved in international business is mainly transported by water and airways.

8. Risk Exposure

The risks involved in domestic business are relatively less.

The risks involved in international business are more due to distance, difference in socio-economic and political conditions. change in foreign exchanges value, etc.,

9. Scope of Market

The scope of market is limited to national boundaries of a country.

The scope of international business is very wide and extends beyond the frontiers of a country.

10. Payment of Excise duty

Payment of excise duty involves simple procedures and it is relatively low in domestic trade

The process of payment of excise is complicated in international business and the rate of excise duty is relatively high.


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11th Commerce : International Business : Differences Between Domestic Business and International Business |


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