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Business, Commerce and Trade

We may distinguish between Business, Commerce and Trade here so as to clarify
these concepts. There is usually confusion in the use of these terms. Their correct
meaning should be understood.
i. Business, in its widest sense, includes all the human activities undertaken for
the sake of earning profit. In other words, it includes (a) industry, (b) trade and
(c) auxiliaries of trade,i.e. transport, banking and insurance. Each of them is
separately a business.
ii. Commerce is narrower than business but broader than trade. It includes (a)
trade and (b) auxiliaries of trade or agencies which facilitate trade. In other
words, Commerce includes trade, transport, banking and insurance.
iii. Trade implies exchange, i.e., buying and selling. It is conveniently divided into
home trade and foreign trade.
iv. Industry refers to production of goods. It is divisible into (a) extractive industries
(like agriculture and mining) and (b) manufacturing industries (like sugar,
iron and steel). (c) constructive industries (like construction of building, roads,
canals, etc.) (d) genetic industries (like poultry farming and nurseries)
For convenience of our study, we divide business into following two categories:

i. Industry
ii. Commerce
Industry
Industry is the part of business which involves the production of goods and services
through the utilization of factors like men, money, material and machine. Industries
can produce consumer goods as well as industrial products. Consumer goods are
intended to be consumed by consumers whereas industrial goods become raw
materials for other industries.
Industry has the following types:

i. Extractive industry: Extractive industries are those industries which are
meant for extracting raw materials and foodstuffs from the soil or from beneath
the earth’s surface. Agriculture, mining, forestry and fishery are important
extractive occupations. Agriculture is concerned with the cultivation of the soil.
Agricultural activities are largely governed by the seasons of the year. Mining
is the bringing out from below the surface of the earth. The mineral deposits
for use in manufactures. Fishing is an important occupation of that section of
population, that inhabits in coastal areas or riverside.

ii. Construction industry: Constructive industry is concerned with construction
of a new product at a particular place by using the goods produced by the
manufacturing industries. Construction of building, roads, canals, dams, etc is
the example of constructive industries.

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