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Trade Practices in India

Vihaan Vashisht 10C

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Introduction

 A trade practice is a common way of conducting business within a

particular industry. It refers to the methods and standards that are
commonly used by businesses to produce and sell their products or
services..
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Some modern trade practices
1. Standardized packaging in food industry-

Food packaging is standardized to ensure the safety of consumers and the

environment. Here are some standards and regulations for food packaging:

I. Materials: Packaging materials must be non-toxic and not react with the food
II. Labeling: Packaging must have the required labeling.
III. Environmental impact: Packaging must be recyclable and made from
sustainable resources.
IV. Testing and certification: Manufacturers must test packaging materials to
ensure compliance.
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2. Franchising-

 A franchise is a type of license that grants a franchisee access to a franchisor's

proprietary business knowledge, processes, and trademarks, thus allowing the
franchisee to sell a product or service under the franchisor's business name. In
exchange for acquiring a franchise, the franchisee usually pays the franchisor an initial
start-up fee and annual licensing fees

 Ex- McDonald's and KFC

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Ancient Trade Practices
1. Bartering

 Barter is a system of exchange in which participants in a

transaction directly exchange goods or services for other goods
or services without using a medium of exchange such as money

 It requires the double coincidence of wants in order to be

applicable

 Bartering was the primary method of exchange for thousands of

years, possibly as long as 4,000 years.
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Guild Trading

 Indian merchants and craftsmen formed trade guilds

called Shrenis, which organized and regulated trade
and craft activities.

 Guilds held significant economic and political

influence and often issued coins and negotiated with
foreign merchants. These guilds facilitated organized
trade in textiles, metalworks, and precious stones,
ensuring quality and consistency, and supported
temples and infrastructure, contributing to local
economies.
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Case study
India’s IT Outsourcing Industry The Gupta Empire

The liberalization of India’s economy in 1991 opened up The Gupta Empire, which flourished from the 4th to the 6th
new avenues for trade, particularly in the service sector. century CE, is often referred to as the "Golden Age" of
One of the most significant developments was the India. During this period, India became a hub of both
emergence of India’s Information Technology (IT) domestic and international trade, significantly impacting
outsourcing industry, which transformed the country into a the economy and culture of the region. The Gupta
global service provider. With a large, educated, and Empire's prosperity was largely due to the rulers’
English-speaking workforce, India quickly became a hub investment in trade, agriculture, and craftsmanship, with an
for IT services, providing software development, customer emphasis on maintaining favorable trade routes and
support, and business process outsourcing to companies relations with foreign regions. India was known for
around the world. The Indian government recognized the producing valuable commodities like spices, silk, textiles,
potential of IT services as a key driver of trade and and precious stones. Spices like pepper, cardamom, and
invested in strengthening technical education through cinnamon, along with fine silk and muslin cloth, were highly
initiatives like the Indian Institutes of Technology (IITs) and sought after in Rome, China, and Southeast Asia. Port
other engineering colleges. This investment created a cities such as Bharuch, Sopara, and Tamralipti became
steady pipeline of skilled IT professionals, giving India a major centers for the export and import of goods.
competitive edge in the global market.
 QUIZ
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1.) Which factor was crucial in the 2.) In ancient India, which items were Which Indian dynasty expanded trade
commonly imported from the Roman Empire? to include the spice and textile trade
success of ancient Indian trade?
significantly?
A) Strategic port cities A) Spices
A) Gupta Dynasty
B) Expensive marketing B) Gold coins
B) Mughal Dynasty
C) Military strength C) Wheat

D) Agricultural exports D) Tea

C) Maurya Dynasty

 What role did Indian guilds play Which ancient empire had strong trade D) Chola Dynasty
in ancient trade? connections with the Gupta Empire?

A) British Empire
A) Tax collection
B) Persian Empire
B) Regulating trade practices
C) Roman Empire
C) Warfare
D) Ottoman Empire
D) Religious ceremonies
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1.) Which Indian city is known as the
“Silicon Valley of India”? India is a major global provider of which type Which country is the largest client of
of outsourced service? India’s IT services?
A) Chennai
A) Manufacturing A) China
B) Delhi
B) Information Technology (IT) B) United States
C) Bengaluru

D) Hyderabad
C) Agriculture
C) Japan
D) Shipping
What has been one effect of India’s Which factor drives India’s IT D) Brazil
success in the IT sector on its cities? outsourcing industry in global markets?

A) Cost competitiveness
A) Decreased urban population
B) High production costs
B) Increased urban development and
C) Expensive labor
infrastructure
D) Climate advantages
C) Reduced migration

D) Less foreign investment

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Similarities of Indian Modern and Ancient trade
1. Diverse Trade Goods:- Both ancient and 2. Merchant Communities and Trade
modern India have traded a diverse range of goods, Networks:-
leveraging the country’s rich natural resources and In ancient times, guilds (Shrenis) managed trade and
skilled craftsmanship. Ancient India was known for maintained networks, while today, Indian business
textiles, spices, and gemstones, while modern India families and trading firms, such as the Marwaris and
exports textiles, spices, handicrafts, and more Gujaratis, continue to operate extensive national and
recently, IT services and pharmaceuticals international networks.

4`. Global and Regional Reach:-

3. Importance of Oceanic and Maritime India has long been part of extensive trade networks.
Trade:- Ancient India had well-developed maritime Ancient India traded across Asia, Africa, and Europe,
routes connecting it to the Arabian Peninsula, with routes like the Silk Road connecting Indian
Southeast Asia, and the Mediterranean. Today, India merchants to international markets. Today, India is
continues to prioritize maritime trade, with ports like still a major player in global trade, exporting to
Mumbai, Chennai. and Kolkata handling a significant countries worldwide and participating in international
portion of international trade, and major shipping trade organizations, maintaining the legacy of
companies facilitating global commerce. extensive trade reach.
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Differences of Indian Modern and Ancient trade
Ancient Trade Modern Trade
1. Currency and Trade Financing- Coins made from metals like India now uses a well-regulated currency (the Indian
silver, copper, and gold were used, but barter was still common, Rupee), and trade financing is supported by a complex
especially in rural areas. Wealthy merchant guilds or temples banking system. Modern financial instruments, digital
sometimes funded trade expeditions. transactions, and credit facilities are widely available,
and financial institutions support businesses with
international trade financing.

2. Government Regulation and Trade Policies- Trade was often Trade is highly regulated by government agencies such
regulated by merchant guilds, and in some cases, by local or as the Ministry of Commerce and Industry, with
regional rulers. Guilds established trade norms, set prices, and even detailed policies governing imports, exports, tariffs, and
handled disputes, operating somewhat autonomously from the foreign investment. As a member of the WTO, India is
government. also bound by international trade rules and standards,
adding layers of complexity to trade regulation.

3. Technological Advancements- Trade relied on basic Trade logistics today are transformed by
modes of transportation, such as carts, animals, boats, and advancements in transportation, like rail, air, and
ships. Information spread was slow, and trade was limited by cargo shipping. Digital platforms, the internet,
geography. and real-time communication have greatly
improved efficiency.
4. Impact on Economy and Employment- Trade was Trade is a critical driver of the economy, directly
essential but limited in scale, and thus supported fewer and indirectly creating millions of jobs. Global
people directly. It enriched a small merchant class and the trade has helped raise living standards, diversify
nobility but had limited reach among the general population. employment opportunities, and improve
infrastructure, although disparities still exist.
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