Difference between foreign trade and domestic trade:

 

Particular

Domestic trade

Foreign trade

Factors of production

Immobile

Mobile

Currencies

No difficulty

The possibility to variations in exchange rates between

different currencies increase

risk

Restriction on trade

Relatively less

Imposed by

– Custom duties

– Fixed quota

– Tariff barriers

– Exchange restrictions

Ignorance

Less ignorance

Difference in culture, religion,language etc

Separate markets

Nepal uses right hand drive

cars

USA uses left hand drive cars

Transport and insurance costs

Less

Obstruct international trade