TradeClass 9 Geography Chapter 9 Notes – Maharashtra Board

Summary: Trade

When we need something we create demand; producers meet it by supplying goods. Buying and selling of goods and services between people to meet each other's needs is called trade. Since no place can produce everything it needs, trade moves goods from surplus regions to deficit regions — e.g. apples from Jammu and Kashmir to other states.

Trade was first done by barter (goods exchanged for goods), but fixing fair value was difficult, so money came into use. Trade in goods is visible trade; paying for services such as transport, a haircut or a doctor's advice is invisible trade.

By quantity, trade is wholesale (large lots from producers, sold to retailers) or retail (small amounts sold directly to consumers). By area, it is domestic (within a country) or international (between countries, bilateral or multilateral). Exports and imports are the heart of international trade.

Balance of trade is the gap between a country's export and import values in a period: favourable (exports more), unfavourable (imports more) or balanced. International organisations such as the WTO, EU, OPEC, SAARC, ASEAN, APEC and BRICS help trade between countries go smoothly.

Marketing — grading, packaging, branding, pricing, advertising and distribution — helps products reach more buyers at a better price, as Dhondiba's vegetables show. Advertisements must be honest; the Consumer Protection Act protects buyers from misleading claims.

Key points to remember

• Demand (buying) + supply (selling) = trade
• No place can make everything it needs; surplus regions supply deficit regions
• Barter = goods exchanged for goods, without money; still found in a few remote areas
• Visible trade = goods; invisible trade = services (transport, doctor, tourism)
• Wholesale: large quantities from producers to retailers; retail: small quantities to consumers
• Domestic (internal) trade: within one country; international trade: between countries
• Bilateral trade = two countries; multilateral = more than two
• Export = selling to other countries; import = buying from other countries
• Favourable balance: exports > imports; unfavourable: imports > exports; balanced: nearly equal
• WTO — Geneva; EU — Brussels; OPEC — Vienna; SAARC — Kathmandu; ASEAN — Jakarta; APEC — Singapore; BRICS — Shanghai (as the book lists)
• Marketing: grading, packaging, branding, labelling, price, promotion and distribution
• Misleading advertisements are checked by the Consumer Protection Act

Trade – Notes

1. What trade is and why it happens

• We buy daily goods from shops, markets or malls. The shopkeeper usually does not make them; they come from factories, farms, wholesale markets and agricultural produce market committees, sometimes from very far away.
• Buyers are consumers; producers make goods; sellers sell them. When we buy, we create demand; when the producer sells, he supplies. This buying and selling to satisfy one another's needs is trade.
• Trade is an important economic activity because people's economic lives depend on each other. Every region has different geographical conditions, so each produces some special goods.
• Where a product is scarce, there is demand; where it is plentiful, there is supply. Goods therefore flow from surplus regions to shortage regions — for example apples from Jammu and Kashmir to the rest of India.
• Barter: in ancient and medieval times goods were swapped for goods — grain for work, or oil, salt, honey and milk for grain. Because it was hard to agree on fair value, money came into use. Barter survives in small ways, e.g. utensils given in exchange for old clothes, and among some tribal communities in remote areas.
• Visible trade means goods are bought and sold (vegetables, books). Invisible trade means services are paid for — a bus fare, a movie ticket, a haircut or a lawyer's or doctor's advice — where you receive no object.

2. Types of trade

• By quantity of goods: wholesale and retail.
• Wholesale trade: traders buy very large quantities straight from producers — farmers, factory owners, orchard owners selling a whole mango or orange crop — and sell them in bulk to retailers.
• Retail trade: shopkeepers buy from wholesalers and sell small quantities directly to consumers, e.g. grocery shops and vegetable vendors.
• By extent of region: local, regional, national and international. Domestic (internal) trade is between regions of the same country. It depends on the country's size, its variety, its natural resources, population, transport and communication, living standards and marketing system. India's varied geography and large population support big internal trade.
• A country's development depends on its domestic trade; when the economy grows, trade grows too — there is a positive link between economic growth and trade.
• International trade is exchange of goods and services between countries. Some countries produce a surplus — crude oil in Saudi Arabia and Kuwait, wheat in the USA and Canada — and send it where it is needed. Between two countries it is bilateral; among more than two, multilateral.
• Import: buying from abroad goods or services that are scarce at home. Export: selling one's surplus goods or services to countries that need them.

3. Balance of trade

• The balance of trade is the difference between the value of a country's exports and imports over a fixed period.
• Unfavourable balance of trade: the value of imports is greater than the value of exports.
• Favourable balance of trade: the value of exports is greater than the value of imports.
• Balanced trade: exports and imports are almost equal in value.
• International trade is harder than domestic trade: the economy, government policy, markets, laws, courts, currency, language and the political relations between countries all affect it.

4. International trade organisations

• To make trade among countries of different economic strength smooth and fair, and to stop trade disputes from spoiling relations, international organisations were formed. Figures below are as the book gives them.
• WTO (World Trade Organisation) — 164 members, Geneva (Switzerland): a forum for trade talks, settles trade disputes, watches members' trade policies, gives technical help and training to developing countries. (Membership has since risen slightly.)
• EU (European Union) — 28 members in the book, Brussels (Belgium): a single market in Europe, free movement of goods, services and capital, no customs duties between members and a common currency, the euro. (The UK left in 2020, so the EU now has 27 members.)
• OPEC (Organisation of Petroleum Exporting Countries) — 13 members in the book, Vienna (Austria): controls international trade in crude oil, sets production levels among members and keeps agreement on oil exports.
• SAARC (South Asian Association for Regional Cooperation) — 8 members, Kathmandu (Nepal): solves common problems of South Asia, raises welfare and living standards, increases regional cooperation and works to reduce unrest.
• ASEAN — 10 members, Jakarta (Indonesia): economic growth with social and cultural harmony in South-East Asia, regional peace and tax relief to boost trade. APEC — 21 members, Singapore: free trade and economic and technical cooperation around the Asia-Pacific. BRICS — Brazil, Russia, India, China, South Africa; Shanghai (China) in the book: funds for members' growth, economic cooperation and economic security. (BRICS has added new members since 2024.)

5. Marketing and advertising

• Dhondiba grew excellent vegetables but got poor prices. His son cleaned and packed them neatly and contacted a supermarket, which advertised and sold them in a mall. Now they sell at a higher price. Lesson: quality, grading and presentation decide the price.
• Marketing is the set of business activities that carry a product from producer to consumer. Its main parts are price, sales promotion, advertising and distribution. The book's Basmati rice example shows the steps: production, classification (whole, broken, dubar), branding (company name, logo), price and promotion, distribution, labelling and attractive packaging.
• Why marketing matters: in today's industrial, globalised world with many choices, it helps a business grow in a planned way, distribute large output quickly, reach many consumers, get a better price, and even recall faulty products.
• Advertisements aim to reach many customers, attract them and persuade them to buy. Information technology and the internet have made the whole world one market, with online trading and e-marketing giving buyers many options.
• Some advertisements give false or exaggerated information, or run down competitors; then people stop trusting them. Rules must be followed, buyers must stay alert, and the Consumer Protection Act was passed to protect them. A wise consumer knows his real needs and pays a fair price.

World trade organisations (as the book lists them)

Key terms

Trade – Flashcards

Read the question, answer it in your head, then tap the card to check. 20 cards.

Trade – MCQ Quiz

15 questions. Tap an option — you will see at once if it is right and why.

How to study Trade

⏱ About 40 minutes

1. Understand trade (10 min)
   Learn demand and supply, barter, visible and invisible trade, with your own examples from home.
2. Classify (20 min)
   Learn wholesale/retail, domestic/international, export/import, balance of trade, and the organisations table with headquarters.
3. Practise (10 min)
   Answer the 'Try it yourself' questions, take the quiz and play 🎮 Play.