Chapter 1 Business Trade & Commerce - 1.7

Class 11
Business Studies
Ajith Kanthi Wayanad

www.hssplustwo.blogspot.com
Chapter 1
Business, Trade
&
Commerce
Section 1
History of Trade and

Commerce
History of Trade and Commerce
Trade and commerce have played a vital

role in making India as a major actor in the
economic word in ancient times
Commercial cities like Harappa and
Mohenjodaro were some examples for the
business development of ancient India
These civilizations had established commercial

connections with Mesopotamia and traded in
gold, silver, copper, gemstones, beads, pearls,
sea shells etc.
Mesopotamian Civilisation
Present day Iraq, Kuwait, Iran and Syria
There were different types of coins and

weighing practices during that time
Indigenous Banking System
As economic life progress, metallic money had been
introduced which in turn accelerated the economic activities
Documents such as Hundi and Chitti were in use

for carrying out transactions in which money passed
from hand to hand
Hundi as an instrument of exchange, it involved a

contract which warrant the payment of money, the
promise or order which is unconditional and capable
of change through transfer by valid negotiation
Indigenous banking system played a prominent role
in lending money and financing domestic and foreign
trade with currency and letter of credit
With the development of banking, people began to

deposit precious metals with lending individuals
functioning as Bankers or Seths
Hundies practiced by Indian Merchant Communities
Name of Hundi Category Function
Payable to any persons – no liability over who received the

Dhani-jog
payment
Darshani Payable to a specific person (someone respectable).

Sah-jog
Liability over who received the payment.
Firman-jog Payable to order
Dekhan-har Payable to the presented or bearer.
Payable to any person – no liability over who received the

Dhani-jog
payment, but payment over a fixed term.
Muddati
Firman-jog Payable to order following a fixed term.
Drawn against dispatched goods. If goods lost in transit, the

Jokhmi drawer or holder bears the costs and the drawee carries no
liability.
Rise of Intermediaries
Intermediaries played an important role in the
promotion of trade. They helped the producers
especially in foreign trade.
They consist of commission agents, brokers and

distributors for wholesale and retail of goods.
Transport
Land Transport and Water Transport were popular in
ancient times
Roads as a means of transportation had assumed

key importance in the process of growth especially
in inland trade
Eg: The northern trade route from Bengal to Taxila
Transport
Maritime trade was another important branch of
global trade network
Muziris (ancient harbor) in Malabar Coast (near to

the present-day Cochin) has a long history of
international maritime trade
Transport
Calicut was also an important market for Chinese to
acquire items like frankincense, pepper (black gold),
pearls, cotton etc.
Pulicat on Coromandel Coast (Tamil Nadu) was a

major port in the 17th century
Textiles were the principal export item from Pulicat
to Southeast Asia
Trading Communities
Different trading communities strengthened in
ancient India and they dominated trade in different
parts of the country
Punjabi and Multani Traders - Northern region

Bhats - Gujarat and Rajastan
Mahajan - Western India
Chatt - South India
Merchant Corporations
They were autonomous corporations (guilds) formed
to protect the interests of the traders
These corporations were organised on formal basis,

framed their own rules and code of conduct, which
even kings were supposed to accept and respect
Merchant Corporations
The guild chief directly dealt with the king or tax
collectors and settled the market toll (tax) on behalf
of its fellow merchants at a fixed sum of money
Major Trade Centres

Major Trade Centres
1
Pataliputra
Patna in Bihar today
Commercial town and major centre for export
of stones
Major Trade Centres
2
Peshawar City in Pakistan
Very popular for export of wool and for the
import of horses. Major transactions between
India, China and Rome in the first century
Major Trade Centres
3
Taxila
City in Pakistan, also called Thakshashila
Popularly known as the city of financial and
commercial banks
Major Trade Centres
4
Indraprastha
Located in the region of present-day New
Delhi
It was a commercial junction where most
routes leading the east, west, south and north
converged (joined)
Major Trade Centres
5
Mathura City in UP
It was an emporium of trade and people here
subsisted (lived) on commerce
Many routes from South India touched Mathura

and Broach (Bharuch in Gujarat)
Major Trade Centres
6
Varanasi City in UP
Well known centre for textile industries and
became famous for gold silk cloth and
sandalwood workmanship
It had links with Taxila and Bharuch

Major Trade Centres
7
Mithila City in Bihar
The traders in this city crossed the seas by boats,
through Bay of Bangal to the South China
They established trading colonies in South China

Major Trade Centres
8
Ujjain City in MP
Different verities of clothes were exported to
different centres.
It had trade connections with Taxila and Peshawar.

Major Trade Centres
9
Surat City in Gujarat
It was an emporium of western trade during
Mughal period
They were also famous for gold boarder sarees

Major Trade Centres
10
Kanchi
Present day Kanchipuram in Tamil Nadu
Chinese came here to purchase pearls, glass
and rare stones and in return they sold gold
and silk
Major Trade Centres
11
Madura City in Tamil Nadu
It was the capital city of Pandya dynasty who
controlled the trade of pearl and fisheries of the Gulf
of Mannar (shallow in between India and Sri Lanka)
Major Trade Centres
12
Broach
Present day Bharuch in Gujarat
It was a major trade centre in Western India
Major Trade Centres
13
Kaveripatta
Present day Kaveripattanam in Tamil Nadu
It was scientific in its construction as a city and
provided loading, unloading and strong facilities of
merchandise
It was also famous for perfumes, cosmetics,

scents, silk, wool, cotton and also for ship building
Major Trade Centres
14
Tamralipti
City in West Bengal (Kolkata)
It was one of the greatest ports connected
both by sea and land
It was linked by road to Banaras (UP) and Taxila

Major
Exports
and
Imports

Major Exports and Imports
Export Items:
Spices, wheat, sugar, indigo, opium, sesame
oil, cotton, parrot, live animals and animal
products etc.
Spices
Major Exports and Imports
Import Items:
Horses, animal products, Chinese silks, linen,
wine, gold, silver, copper, etc.
Chinese silks
Position of Indian Subcontinent
in World Economy
(1AD to 1991)
India in World Economy
From 1st to 7th centuries, India was estimated to

have the largest economy in the world
The country was often referred as ‘Swarnabhumi’
and ‘Swarnadweep’ by many writers and travelers
like Megasthenes, Faxian (Fa Hien), Xuanzang
(Huen Tsang) etc. because of its prosperity
India in World Economy
During 18th century, the British empire began to

take roots in India, thereby the Indian economic
condition was slowly changed from being an
exporter of processed goods to the exporter of raw
materials and buyer of manufactured goods
India begins to
Reindustrialise
India begins to Reindustrialise
After independence, the process of rebuilding the
Indian economy have been started
As a part of this the first five year plan was
implemented in 1952.
5 Year Plan
Due importance was given to the establishment of

modern industries, modern technological and
scientific institutes, space and nuclear programs
To overcome the problems of lack of capital, rise in

population, huge expenditure on defence,
inadequate infrastructure etc. India relied heavily on
borrowings from foreign sources and finally, agreed
to economic liberalization in 1991
Liberalization
The Indian economy is one of the fastest growing
economies in the world today
The high growth sectors have been identified, which
are likely to grow at a rapid pace
The recent initiatives of the Government of India

such as ‘Make in India’, ‘Skill India’, ‘Digital India’,
Foreign Trade Policy 2015-20 etc. is expected to
help the economy in terms of exports and imports
and trade balance
Section 2
Nature and Concept

of Business

Concept of Business
The term business is derived from the word ‘busy’.
Therefore, business means being busy.
Business refers to an occupation in which people

regularly engage in activities related to purchase,
production and / or sale of goods and services with a
view to earn profits
Concept of Business
Business is defined as the “repeated buying and
selling or manufacturing of goods and services with
an intention to earn profit which involves the creation
of wealth.”
Example; A factory, A retail shop, Commission

agents, brokers etc.
Concept of Business
People undertake various activities to satisfy
their needs
These activities can be classified into two, they are

Economic Activities and Non-Economic Activities
Economic
Activities Non-Economic
Activities
Human
Activities
Economic Activities
Economic Activities
Activities undertaken to earn money or

money’s worth and related to production and
exchange of wealth
Eg; Running a factory, Retail shop, Cultivating land etc.

Economic Activities
Characteristics of Economic Activities
a. Related to Production of Wealth

Economic Activities
b. To Satisfy Human Wants

Economic Activities
c. Expectation of Earning Money

Economic Activities
d. Basis for Economic Development of the

Society
Non-Economic Activities
Activities which are undertaken not for any

reward but for the personal satisfaction
Example: A mother looks after her children,

A house-wife cooks food for the family,
Visiting Temples etc.
Differences Between
Economic Activities &
Economic Activities Vs.
To earn money or
money's worth For personal
satisfaction
Economic Non-Economic
Activities Activities
It can be measured
In terms of money It cannot be
Measured in
Monetary terms
Money is
the reward Mental satisfaction
Is the reward
Types of
Economic Activities

Types of Economic Activities
Business Profession Employment

Characteristics of
Business

Characteristics of Business
1. An Economic Activity
It is undertaken with an object of earning
money or livelihood but not for love,
affection etc.
Eg: Purchase and sale of articles by a shop keeper

2. Production or Procurement of Goods

and Services
Every business
should either
produce or acquire
the goods in which
it deals
Goods may consists of capital goods and consumer goods
Eg: Capital Goods: Machinery, Furniture,
Consumer Goods: Sugar, Pen, Notebook etc.
Services may include facilities offered to

consumers like transportation, banking,
electricity etc.
3. Sale or Exchange of Goods & Services
There should be sale or exchange of
goods or services between the seller and
buyer
Goods produced for personal consumption is not a business

4. Dealing in Goods & Services on a
Regular Basis
A single transaction cannot be treated as a
business
Eg: A persons sells his old scooter even at a profit cannot be

treated as a business as there is no continuity.
5. Earning Profit
The business activity must be intended to

earn profit
Businessman should take all possible efforts to maximise

the profit by increasing sales volume or reducing cost
6. Uncertainty of Return
No business can predict its future profit

7. Element of Risk
Every business is subject to risk due to
various reasons
Eg: Change in fashion, fire, theft, natural calamities etc.

1. Economic Activity
2. Production of Goods and Services
3. Sale or exchange of Goods and Services
4. Regular Dealings
5. Earning Profit
6. Uncertainty of Return
7. Element of Risk
Comparison of Business
Profession & Employment

Business – Profession - Employment
1 Mode of establishment
Based on Membership of Appointment

entrepreneur's professional Order
Decision body
2 Nature of work
Providing Performing
Rendering work as per
goods and
personalised service
services to the
expert services contract
public
3 Qualification
Prescribed As prescribed
No minimum by the
qualification
qualification employer
and training
4 Reward of return
Salary or
Profit Fees Wage
5 Capital investment
Large capital Limited

based on the capital No
size of Capital
business
6 Risk
High Little No
Risk Risk Risk
7 Transfer of interest
Not Not
Transferable Transferable
Transferable
8 Code of conduct
Professional
No code of Laid down by
code of
conduct is the employer
conduct
prescribed
followed
9 Examples:

Jobs in banks,
CA, Legal, insurance,
Shop, Factory Govt.
Medical
etc. departments
Profession etc.
etc.
Comparison: Business, Profession and Employment
Basics Business Profession Employment
Mode of Entrepreneur’s decision Membership of a Contract of

1
Establishment and legal formalities professional body employment
Rendering
Providing goods and
2 Nature of work personalized and As per the contract
services to the public
expert service
Prescribed
Prescribed by the
3 Qualification No minimum qualification qualification by the
employer
professional body
4 Reward or return Profit Fees Salary or wages
5 Capital Investment High Limited No capital

Comparison: Business, Profession and Employment
Basics Business Profession Employment
6 Risk High Limited risk Little risk
7 Transfer of interest Possible Not possible Not possible
Prescribed by the Laid down by the

8 Code of conduct Not prescribed
professional body employer
Jobs in banks,
CA, Legal, Medical
9 Examples Shop, Factory etc. insurance, govt.
Profession etc.
departments etc.
Classification of
Business Activities

Classification of Business Activities
Industry Commerce
Industry
Industry refers to that part of business which is

concerned with the production of goods and
material
An industry may be classified into primary industry,

secondary industry and tertiary industry
Types of
Industries

Types of Industries
Primary Industry
Engaged in extracting, producing and

processing of natural resources
Eg: Extractive industries

and genetic industries
Classification of Primary
Industries

Classification of Primary Industries
Extractive
Industries
They are engaged in the extraction
( collection) of useful materials from the
earth and sea
Eg: Mining, fishing, quarrying etc.

Extractive
Industries
The products of these industries are either
directly consumed or used as raw
materials by other industries
Coal
Genetic
Industries
Engaged in the reproduction or
multiplication of plants and animals
E.g. Plant nurseries, Poultry farms, cattle breeding

farms etc.
Types of Industries
Secondary Industries
They are concerned with the materials

which have already been produced at the
primary stage
Oil Refinery
Eg: Manufacturing industries and

Construction industries
Classification of
Secondary Industries

Classification of Secondary Industries
Manufacturing
Industries
Engaged with the conversion of raw
materials into finished goods
E.g: Cotton into textiles, timber into furniture etc.

Manufacturing
Industries
They change the form of goods i.e. raw

material into finished goods and thus
create form utility
Raw Materials for

Cement
Manufacturing
Industries
They produce Consumer Goods, Industrial
Goods and Capital Goods
Types of
Manufacturing Industries

Types of Manufacturing Industries
a Analytical Industries
Analyses and
separates different
elements from the
same materials
Eg: Oil refinery

b Synthetical Industries
Combines various ingredients into a new
product
Eg: Cement is produced from Lime, Silica,

Magnesia etc.
c Processing Industries
It involves successive stages for
manufacturing finished products
Paper Making Process
Eg: Sugar, Paper etc.

d Assembling Industries
Assembles different component parts to
make a new product
Eg: Car, T V, Computer, Mobile Phone etc.

Construction
Industries
Engaged in the construction of buildings,
dams, roads, bridges etc.
They use the products of manufacturing

industries and extractive industries
Types of Industries
Tertiary Industries
They are providing support services to

primary and secondary industries and it
form part of commerce
Insurance
Eg: All service activities which are auxiliaries to trade

like transport, banking, insurance etc.
Commerce
Commerce
It is concerned with buying, selling and distribution of
commodities and it is an organized system for
exchange of goods and services in between the
businessman and the customers
Commerce
It is also concerned with the marketing aspects
of business, i.e. supply of right type of goods to
the right persons, at the right time and at the
right price
:. Commerce includes trade and aids to trade

Commerce
Commerce
Trade Aids to
Trade
Commerce
Definition
The sum total of all those activities which are

involved in the removal of hindrances in the
process of exchange of goods
Functions of
Commerce
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m
Functions of Commerce
1. Removal of Hindrance of Person
It refers to the lack of contact between the
producers and customers
Here the trader acts as an intermediary among them

and customers are able to find out the products which
they are wanted from the market
2. Removal of Hindrance of Place
Producers and customers are in distant places,
hence the commodities should be transferred
from the production centre to the customers
This problem can be solved by the system of

commerce by means of transport, packing and
insurance
3. Removal of Hindrance of Risk
Goods and properties of business are subject to
various risk such as fire, theft, damage etc.,
They can be protected by insurance

4. Removal of Hindrance of Time
There may be a gap between the production and
consumption as the production is carried out in
anticipation of future demands
Therefore, it becomes necessary to store the
goods until they are sold
This problem can be solved by warehousing

5. Removal of Hindrance of Knowledge
Knowledge of customers about the products and
services offered by business organisations is a
major problem in business
Advertising helps in the removal of hindrance of

knowledge among the buyers
6. Removal of Hindrance of Finance
The problem of finance can be handled by banks,
which form part of commerce
It will also help the businessman in exchange of

money between different persons at different
places
1. Removal of Hindrance of Person
2. Removal of Hindrance of Place
3. Removal of Hindrance of Risk
4. Removal of Hindrance of Time
5. Removal of Hindrance of Knowledge
6. Removal of Hindrance of Finance
Make in India
It is an initiative launched by the Government of

India on 25th September 2014, to encourage
national and multinational companies to
manufacture their products in India.
Make in India
Its major objectives are job creation and
skill enhancement in 25 sectors of the
economy.
Some of them are, Automobile, Aviation, Biotechnology,
Chemicals, Construction, Defense, Electrical Machinery,
Food processing, I T, Oil and Gas, Media and
Entertainments, Mining, Railways etc.
Trade

Trade
Buying and selling of goods, which involves the

exchange of commodities for money or money’s
worth
Types of Trade
Trade
Home Foreign
Trade Trade
Types of Trade
Home Trade
It is also known as Mumbai
domestic trade
or internal trade
Kochi
Buying and selling of goods within the country

and both the buyer and seller should belong
the same nation
Types of Trade
Home
Trade
Wholesale Retail
Trade Trade
Types of Trade
a Wholesale Trade
Buying and selling in large quantities
A wholesaler buys goods directly from the

producers and sells them to the retailers
Types of Trade
b Retail Trade
Buying and selling of goods in small quantities
A retail trader buys goods from the wholesalers

and sells them to the customers
Types of Trade
Foreign
Trade
Export Import
Entrepot
Types of Trade
Foreign Trade
It is also known as External trade or
international trade
It involves the buying and selling of goods and

services in between the persons belonging to two
or more countries
Types of Trade
a Export
Sale of goods to foreign countries
Types of Trade
b Import
Purchase of goods from foreign countries
Types of Trade
c Entrepot
Importing goods from one country for the purpose
of exporting them to some other countries
England India China

Types of Trade
Home Trade Foreign Trade
Wholesale Trade Retail Trade
Export Trade Import Trade Entrepot Trade

Aids to Trade
(Auxiliaries to Trade)

Aids to Trade
The activities which assist trade are called

Aids to Trade or Auxiliaries to Trade
Aids to Trade
Aids to trade includes Transport, Banking,
Insurance, Warehousing, Advertising etc.
These service enterprises facilitate movements,

finance, risk coverage, storage, and sales
promotion of goods
Aids to Trade
1 Transport and Communication
Usually production takes place in certain locations
and consumption all over the country
This problem is removed by transport through

various modes such as road, rail or water
transport
Aids to Trade
Along with transport, Communication is very
essential, which helps the producers, traders and
consumers in exchange of information
Postal service, telephones and other modern

means of communication may be regarded as
auxiliaries to business activities
Aids to Trade
2 Banking and Finance
All business concerns need fund for acquiring
assets, raw materials and meeting day today
expenses
Finance is the foundation of all business

provided by banks
Aids to Trade
How banks help the business ?
Banks accept deposits from the public and provide
credit facilities for business
They lend money (O/D, CC, Loans), discounting of

bills, collection of cheques, remittance facilities and
various other services to the business community
Aids to Trade
3
Insurance
Insurance provides protection against the risk of
loss due to accident, fire, earthquake, theft,
damage of goods in stock and transit
On payment of a nominal amount called premium,

the amount of loss or damage is compensated by
the insurance company
Aids to Trade
4 Warehousing
Production is always in anticipation of future
demands, so that the products are to be kept in
good condition until they are sold
Warehouses facilitates storage of goods and

stabilises prices by equalising supplies
Aids to Trade
5 Advertising
It helps to reach millions of customers for
promoting sales and giving information
about the product
Thus advertising makes

possible marketing of
goods and services on a
large scale
Aids to Trade
(Auxiliaries to Trade)
1. Transport and Communication

2. Banking and Finance
3. Insurance
4. Warehousing
5. Advertising
Objectives of
Business

Objectives of Business
a
Market Standing
It refers to the position of an enterprise in
relation to its competitors by providing quality
products and better service to its customers
b
Innovations (Novelty)
Innovation means the introduction of something
new to the market. It may be a new design,
new quality for the existing product, new
method of production etc.
1990's
c
Productivity
Every enterprise should aim at greater
efficiency and productivity by the best use of
available resources
d
Physical and financial resources
Acquiring physical resources like buildings,
plant and machinery, offices etc. and financial
resources or fund for its operations and ensure
its efficient use
e
Earning profits
Profit is regarded as the life-blood of a
business to survive and to make growth and
development of the enterprise
f
Manager performance and
development
The enterprise should take much initiative to
improve the efficiency of its managers by
conducting various programs to motivate them
g
Worker performance and attitude
Every enterprise should aim at improving its
workers performance and their positive attitude
i
Social responsibility
It refers to the social obligations of business
firms to contribute resources for solving
social problems and to work in a socially
desirable manner
a) Market Standing
b) Innovations
c) Productivity
d) Physical and Financial Resources
e) Earning Profits
f) Manager Performance
g) Worker Performance
h) Social responsibility
Business Risk

Business Risk
Risk = Possibility of loss
It can be defined as the chances of loss due
to certain uncertain events in the future
Business Risk
Types of
Risk
Speculative Pure
Risk Risk
Business Risk
Speculative Risk
It involves both chances of gain or loss.
If the market condition is favourable it will
result in gain, otherwise, loss.
It arises due to change in demand and supply,

change in taste and habits of customers etc.
Business Risk
Pure Risk
Possibility of loss or even no loss.
If such events take place, it may result in
loss, non-occurrence of such events results
in absence of loss, instead of gain
It arises due to fire, theft, earthquake, strike etc.

Nature of Business Risk
1
It arises due to uncertainties
Lack of knowledge about what is going
to happen in future
Govt.
ti c
Pl oid
Policy
as
gs r
Av
Pa e
Ba p e
Us
Eg: Change in demand, Govt. Policy, Epidemic like

Corona Virus etc.
2
It is an essential part of every business
Every business has its own risks, no
business can avoid risk
Risk can be minimised but cannot be eliminated

3
Degree of risk depends on the nature and
size of business
Eg: 1. Business dealing with fashionable items has a high

degree of risk
2. A large scale business has high risk than small scale
4
Profit is the reward for bearing risk
An entrepreneur takes risks under the
expectation of higher profit
No risk
means no
gain
Methods of
dealing with Risk

How to deal with Business Risk
Methods of dealing with risk:
1.Not to enter high risky transactions

2.Take precautionary measures like fire
fighting equipments etc.
3.Take an insurance policy to cover various
risks.
4.Take measures like provision for bad debts,
investment fluctuation fund etc.
Causes of
Business Risk

Causes of Business Risk
1
Natural Causes
Risk due to natural calamities
It may include damages from flood, fire,

earthquake etc.
2
Human Causes
It may arise due to certain human activities
Eg: Theft, bad debt, mistakes, accidents etc.

3
Economic Causes
It includes uncertainties relating to demand for
products, competition, price, change in
technology, rise in interest rate, higher taxes etc.
4
Other Causes
Political disturbances, mechanical failures,
change in exchange rates, etc. come under
this category
Natural
Causes
Other Causes Human

Causes of Risk Causes
Economic
Causes
Starting a
Business
Basic Factors
Starting a Business - Basic Factors
1
Selection of line of business
Nature and type of business that an
entrepreneur should choose to start his
business
Jewellery Textiles
2
Size of the firm
The promoter has to decide the size of
business, which may be either small scale,
medium scale or large scale depends on the
financial stability, future demand etc.
Small scale Medium scale Large scale

3
Choice of form of ownership
The promoter must decide whether he wants
to start a sole proprietorship concern,
partnership firm, private company, public
company, or cooperative society
Sole Proprietorship Partnership

4
Location of business
It must be decided on the basis of availability of land,
electricity, water, accessibility to market,
transportation, scope for expansion etc.
Unscientific location affects the efficiency and

profitability of business.
5
Financing the proposition
(Capital needs)
The promoter has to decide about the
requirement of capital and its sources
Shares
Deposits Debentures
Loans
He has to consider the sources like shares, debentures or

bank loans, cost of capital (interest or dividend) etc.
6
Physical facilities
It means the resources used to convert raw
material into finished goods
Eg: Buildings, machines and equipments, skilled and

unskilled workers, good quality raw materials etc.
7
Plant lay out
A proper arrangement of machines, equipment and
workers will result in reduction of wastages, better
use of available space, safety and security to
workers etc.
Plant
Lay out of
Recycling
Glass Bottles
It also increases profit of the business.

8
Competent and committed work force
A proper manpower planning is necessary to
calculate the number of employees (skilled and
unskilled) to be appointed in various positions,
and their qualities
9
Tax planning
It means to minimize the taxes through better
planning about location (tax free zones), size
of business etc.
Tax planning does not mean non-payment of tax

10
Launching the enterprise
Finally the entrepreneur launch his business by
mobilizing necessary resources, starting
production process and initiating sales promotion
activities
Starting a Business Basic Factors
1. Selection of line of business
2. Size of the firm
3. Ownership
4. Location
5. Capital Needs
6. Physical Facilities
7. Plant Lay Out
8. Competent Work Force
9. Tax Planning
10. Launching the Enterprise
Prepared by: Ajith Kanthi @ Ajith P P
SKMJ HSS Kalpetta Wayanad Kerala
Ph: 9446162771, 7907712665
www. hssplustwo.blogspot.com

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Class 11

Ajith Kanthi Wayanad

History of Trade and

Trade and commerce have played a vital

These civilizations had established commercial

There were different types of coins and

Documents such as Hundi and Chitti were in use

Hundi as an instrument of exchange, it involved a

With the development of banking, people began to

Name of Hundi Category Function

Payable to any persons – no liability over who received the

Darshani Payable to a specific person (someone respectable).

Firman-jog Payable to order

Dekhan-har Payable to the presented or bearer.

Payable to any person – no liability over who received the

Drawn against dispatched goods. If goods lost in transit, the

They consist of commission agents, brokers and

Roads as a means of transportation had assumed

Muziris (ancient harbor) in Malabar Coast (near to

Pulicat on Coromandel Coast (Tamil Nadu) was a

Punjabi and Multani Traders - Northern region

These corporations were organised on formal basis,

Ajith Kanthi Wayanad

Many routes from South India touched Mathura

It had links with Taxila and Bharuch

They established trading colonies in South China

It had trade connections with Taxila and Peshawar.

They were also famous for gold boarder sarees

It was also famous for perfumes, cosmetics,

It was linked by road to Banaras (UP) and Taxila

Ajith Kanthi Wayanad

From 1st to 7th centuries, India was estimated to

During 18th century, the British empire began to

Due importance was given to the establishment of

To overcome the problems of lack of capital, rise in

The recent initiatives of the Government of India

Nature and Concept

Ajith Kanthi Wayanad

Business refers to an occupation in which people

Example; A factory, A retail shop, Commission

These activities can be classified into two, they are

Activities undertaken to earn money or

Eg; Running a factory, Retail shop, Cultivating land etc.

Characteristics of Economic Activities

a. Related to Production of Wealth

Characteristics of Economic Activities

b. To Satisfy Human Wants

Characteristics of Economic Activities

c. Expectation of Earning Money

Characteristics of Economic Activities

d. Basis for Economic Development of the

Activities which are undertaken not for any

Example: A mother looks after her children,

Ajith Kanthi Wayanad

Business Profession Employment

Ajith Kanthi Wayanad

Eg: Purchase and sale of articles by a shop keeper

2. Production or Procurement of Goods