Introduction

Constraints and potential

Impact on society

Issues and problems

Commercial activities Characteristics of commercial activities Infrastructure

Industry

The buying and selling of goods and services is called trade.

The term trade can also be used to indicate the people or organisations that do business in the same kind of product, for example the car trade, the book trade, etc.

There are two types of trade namely; home (local) trade and International or foreign trade.

Commerce is a more general term: it is used to describe trade and all the other business activities and services which make trade possible, e.g. banking, insurance, transport and advertising.

Without trade and commerce , people all over the world enable to fufill their needs.

Every basic need of an individual depends on trade.

The economy of a country or state also depends on its trade and commerce.

imports have a positive impact on productivity because they increase competition and thus lead to an improved allocation of resources and better management practices.

A manufacturer takes the materials extracted or produced by a producer (raw materials) and transforms them into semifinished or finished products.

A retailer sells goods in small quantities to individual consumers. Examples of retailers are shop, supermarkets, department stores or discount stores.

A wholesaler buys in large quantities from manufacturers and sells them in smaller quantities to retailers.

Commercial areas in a city can take up about 5% of a citys land. It is used for commercial activities. These activities include the buying and selling of goods and services in retail businesses, wholesale buying and selling, financial establishments, and wide variety of services that are broadly classified as "business". Even though these commercial activities use only a small amount of land, they are extremely important to a communitys economy.

They provide jobs and bring money into the community.

Different places are famous for different commercial activities.

For example: Ludhiana is famous all over the India for textile industry and it is imported to different places in India.

It includes services required for any trade or commerce. for example:

BANKING

INSURANCE

FINANCE

WAREHOUSING

ADVERTISING

TRANSPORTATION

INFRASTRUCTURE

PUBLICITY

1. Transportation:

Transportation refers to the conveyance of goods and passengers from one place to another. Goods are produced at one place and consumed at another place. For example, tea is produced mainly in Assam and West Bengal but is consumed all over the world. Transport helps to increase the size and scale of business. Thus, transport has become the lifeline of modern industry and trade.

2. Warehousing:

Now-a-days goods are produced in anticipation of demand. It is, therefore, necessary to store and preserve the goods until they are sold. Many products such as wheat, sugar, rice, etc. are produced in a particular season but they are needed throughout the year. It helps to stabilise prices through equal distribution of surpluses over different time periods.

3. Insurance

Business involves several types of risk e.g., risks arising from price fluctuation dishonesty of employees, bad debts, exchange rate fluctuations, loss of goods in transit and storage, fire, floods, etc. Insurance removes the hindrance of risk. A large number of people who are subject to a particular risk contribute to common fund, out of which compensation is paid to those few who actually suffer the loss. It helps businessmen to develop sense of security and freedom from anxiety.

4. Banking and finance:

There is usually a time gap between production or purchase and

sale of goods. It takes time to collect money after sale of goods on credit. During this period, businessmen need finance to carry on their business activities.

Production and distribution of goods and services on a large scale requires a huge amount of money at low rates of interest. Banks provide funds in various forms e.g. loans, overdraft, cash credit, discounting of bills, etc.

5. Advertising and publicity:

Advertising and publicity inform the consumers about the availability of various products and services. Advertising educates consumers about the use of products and provides them greater satisfaction. The main purpose of advertising is to create and sustain demand. There are various forms of advertising and publicity such as the press, outdoor, displays, radio, television, letters to customers, fairs, exhibitions, cinema, etc

6. Other aids:

Proper packing of goods is essential for efficient trade. Packing attracts consumers to buy goods. Proper packing prevents damage to goods in the process of transport and warehousing. Modern means of communication like telephone, telex, and postal services have become essential for the expansion of trade and industry.

Industry is the production of a good or service within an economy. Manufacturing industry became a key sector of production and labour. Many developed countries and many developing/semi-developed countries depend significantly on industry. It is directly linked to trade and commerce,because in industry,different types of products are made which by means can be import and export.

1.

Distance:

There is a great time lag between placement of order and receipt of goods. Distance creates higher costs of transportation and greater risks.

2. Different languages:

Different languages are spoken and written in different places. Price lists and catalogues are prepared in different languages. A trader wishing to buy or sell goods at different places must know the different language or employ somebody who knows that language.

3. Difficulty in transportation and communication:

Dispatch and receipt of goods takes a longer time and involves considerable expenses. During the war and natural calamities, transportation of goods becomes even more difficult. Similarly, the costs of sending or receiving information are very high.

4. Risk in transit:
Foreign trade involves much greater risk than home trade. Goods have to be transported over long distances . Many of these risks can be covered through marine insurance but increases the cost of goods.

5. Import and export restrictions:

Every country charges customs duties on imports to protect its home industries. Similarly, tariff rates are put on exports of raw materials. Importers and exporters have to face tariff restrictions.

6. Problems in payments:
Every country has its own currency and the rate at which one currency can be exchanged for another (called exchange rate) keeps on fluctuating change in exchange rate create additional risk. Due to wide time gap between dispatch of goods and receipt of payment, there is greater risk of bad debts.

7. Investment for longer period:

There is longer time gap between supply of goods and receipt of payment. Therefore, the exporter's capital remains locked up over a longer period.

8. Intense competition:

Heavy expenditure on advertising and sales promotion may be necessary.

Electricity appears to be the main constraint to trade expansion. Electricity is not provided in sufficient quantities to satisfy the needs of companies and individuals. Electricity shortages slow down the development of economic activities, private sector, and international trade.

transportation problems constrain more trade performance through the availability of infrastructure than through its quality.
Infrastructure problems are a significant constraint to trade.

Proper land should be allotted to different commercial activities while planning a city or state. Infrastructure should be proper. The taxes should be less on transportation because it increases the cost of the object. All the services like electricity , water should be provided properly so that there should be no problem at the time of manufacturing of goods.