This article is written by Sahil Arora. The article talks about the situation in which the accused enters into a bargain with the victim for compensation in return for minimising the sentence. The defendant pleads guilty to a lesser offence or (in the case of multiple offences) to one or more of the offences charged in exchange for more lenient sentencing, recommendations, a specific sentence, or a dismissal of other charges. 

It has been published by Rachit Garg.

Introduction

The newly appointed Law Minister of India, Arjun Ram Meghwal, informed the Rajya Sabha that the number of cases pending in Indian courts has crossed the mark of 5 crore. These cases are pending in the Supreme Court of India, 25 high courts and subordinate courts. There could be numerous reasons for the pendency of these cases, such as lack of infrastructure, procedural delays, inadequate legal aid, vacations and holidays, an insufficient number of judges, a delay in the appointment of judges, and a lot more. No matter what the major reason for this is, but at the end, it is the parties to the case that have to suffer. The victim has to wait for years to get justice, and unfortunately, sometimes they are not alive during the time they get justice. On the other hand, the accused also has to face criticism from society along with the harsh behaviour of the officials, even if he is innocent until he is declared so by the court. So to deal with all these problems, the lawmakers of India added a special chapter in the Code of Criminal Procedure (CrPC), 1973, under the heading of ‘plea bargaining’. It is not a new concept; already, there are around 90 countries in whose legal systems there is a provision for this concept.

What is plea bargaining

By breaking this term into two parts, we can more easily understand the meaning of the term plea bargaining. In the context of this concept, the word ‘plea’ means “request” and the word ‘bargaining’ means “negotiation”. So, in simple terms, it means a process under which a person who is charged with a criminal offence negotiates with the prosecution for a lesser punishment than what is provided in law by pleading guilty to a less serious offence. It is based on the principle of ‘Nolo Contendere’, literally meaning ‘I do not wish to contend’.

This explanation contains in itself various elements, like, firstly, that this concept can only be used in the case of a criminal offence. In civil cases, the victim cannot make use of this tool. Secondly, the accused or defendant in this concept negotiates with the prosecutor. Thirdly, here both parties make an agreement where the defendant promises that he will plead his guilt in front of the court, and in return, the prosecutor makes some concessions in his punishment and lessens his punishment to some extent. One thing that is to be noted is that in all this process, there is no active role for the judge. He only has a supervisory role to play.

According to the Black’s Law Dictionary, plea bargaining is “an agreement set up between the plaintiff and the defendant to come to a resolution about a case without ever taking it to trial.”

The concept of plea bargaining is contained in Chapter XXI-A of the CrPC under Sections 265A-265L. This part was added by the Criminal Law (Amendment) Act of 2005. These provisions provide the procedure for filing the application of plea bargaining, and along with it, they also put limitations or exceptions where this concept cannot be used.

Exceptions to plea bargaining

1. Offences that are punishable with death, imprisonment of life, a term exceeding 7 years of imprisonment,
2. Offences against women (like stalking or rape),
3. Offences against children under the age of 14
4. Offences that affect the socio-economic condition of a country (like food adulteration or money laundering)
5. Apart from this, where the court finds that a person has been convicted under the same offence previously or that he (accused) has involuntarily filed the application under this concept, the court can proceed further in accordance with the law from the stage where such an application has been filed.

Examples of plea bargaining

Reduction of charges

In some cases, a defendant may decide to plead guilty to a charge that is less severe than the original accusation in order to receive a more lenient punishment. For instance, someone who has been charged with aggravated assault might choose to plead guilty to simple assault in exchange for a reduced sentence.

Dismissal of charges

A defendant may choose to plead guilty to a lesser offence or accept a reduced sentence in return for the dismissal of certain charges. For instance, someone accused of multiple counts of theft might plead guilty to only one count and have the remaining charges dismissed as part of a negotiated agreement for a shorter sentence.

Recommendation for a specific sentence

If the defendant pleads guilty, the prosecution has the discretion to suggest a specific sentence. For instance, in a case involving embezzlement charges, the defendant may opt to plead guilty and, as a result, be granted probation on the condition of making complete restitution.

History and evolution of plea bargaining

Plea bargaining has a very long and varied history across the world. Its origin can be traced back from the time of Rome to present-day America, and it is now spreading across numerous developed and developing countries’ legal systems.

Ancient origins

Ancient Rome

The practice of plea bargaining was referred to as “in iure cessio” under ancient Rome. In this system, the defendant had the option to avoid a formal trial by confessing his guilt and willingly submitting himself to the punishment. As a result, the defendant often received reduced penalties or avoided harsher punishments, such as death.

Ancient Athens

In ancient Athens, a similar practice known as “sycophancy” prevailed. Defendants had the opportunity to negotiate with the accused person in order to bypass or avoid the formal legal proceedings by either admitting their wrongdoing or providing restitution. This informal process aimed to settle disputes without burdening the legal system.

Germanic Law

During medieval times in Europe, Germanic law systems introduced the elements of plea bargaining. Defendants had the opportunity to reach agreements with victims or authorities to compensate for the crimes they committed, which often resulted in reduced sentences or fines. These agreements played a very crucial role in maintaining social order in society.

Islamic Law

Islamic legal traditions also included aspects of negotiated settlements, particularly in cases involving financial compensation or restitution. The focus was on achieving justice and making amends, rather than solely punitive measures.

Medieval Europe

Throughout the medieval era in Europe, spanning approximately from the 5th century to the 15th century, the legal systems displayed significant diversity. Sometimes they lacked the centralised structures that are prevalent in modern times. Although plea bargaining did not exist as a formalised process at that time, informal negotiations and settlements were customary in nature in various forms. A few of them are described below:

Compurgation

One popular and widely employed technique was known as “compurgation” or “ordeal by compurgation.” According to this system, the defendant would solemnly declare their innocence, and with the assistance of a few oath-helpers who would act as witnesses, they would testify about the good reputation of the defendant. If a satisfactory number of oath-helpers were obtained, the defendant would be then discharged or acquitted of the charges. This procedure involved negotiations between the accused individuals and their supporters so as to evade severe penalties.

Wergild

Another concept that was widely accepted in the medieval Europe was “wergild,” or “blood money.” The term is referred to as the sum of money that victims or their families would receive as compensation from the liable or guilty party, the perpetrator or wrongdoer, or their relatives. This compensation purpose is to prevent any escalation of conflicts or legal actions, and instead of focusing on facilitating negotiated settlements as a means to resolve disputes.

Trial by combat

In certain specific situations, the individuals had the opportunity to resolve their conflicts by engaging in combat. This approach enabled the accused person to battle their accuser as a way to establish their innocence. Despite the inherent risks, it still provided an opportunity for the accused to avoid harsher penalties.

Involvement of church

The medieval legal system often had strong connections and ties to the church with ecclesiastical courts, which are also known as court Christian or court spiritual and also played a crucial role in their time. The church promoted reconciliation and forgiveness, and in some situations, it also urged mediated settlements as a means to seek self-punishment and avoid grave spiritual consequences.

The aforementioned practices should not be seen as formalised plea bargaining systems but rather as ‘informal means’ for individuals to negotiate or resolve conflicts. These early negotiation and settlement methods laid the foundation for the establishment and development of more organised plea bargaining systems in the following centuries.

United States

Plea bargaining, as we know it today, has a significant history and impact on the U.S. legal system. Mentioned below is a comprehensive analysis of its evolution:

Early use

The concept of plea bargaining can be traced back to the 19th century in the United States. During that time, an excessive number of cases overburdened the courts, and trials were frequently lengthy and expensive. As a result, informal discussions or negotiations between the defendants and prosecutors began taking place during this period.

Rise in the 20th century

The concept of plea bargaining gained popularity in the coming years, which can be attributed, in one way, to the increase in the number of cases resulting from criminal activities during the ‘prohibition era’. Prosecutors started utilising plea bargains as a technique to ensure convictions and, at the same time, reduce the uncertainties associated with the trial outcomes. And on the other hand, the growing percentage of reduced charges in exchange for guilty pleas shows that the prosecutors may have found it proper to offer greater concessions in return for guilty pleas.

Formalisation

In the 20th century, plea bargaining went through the process of formalization. Pioneering legal scholars acknowledged its indispensability to the criminal justice system, leading to its wider adoption by the courts. A milestone was reached in 1970 in the landmark case of Brady v. United States, where the Supreme Court of the U.S. upheld the constitutionality of plea bargaining.

Role of sentencing guidelines

The implementation of sentencing guidelines in the late 20th century significantly influenced the practice of plea bargaining. Defendants who chose to go for a trial and who were convicted eventually faced a greater likelihood of receiving harsh sentences. Consequently, this provision provided them with a strong incentive to engage in plea negotiations with the opposing victim party.

Controversy and critique

Despite being widely used, plea bargaining has faced significant criticism. There are people who believe that it can result in unfair outcomes, as individuals who are accused may feel pressured to agree to the agreements even when they are not guilty. Furthermore, some individuals also express apprehensions regarding the lack of transparency and the potential for coercion during the negotiation process.

Present situation

Currently, plea bargaining holds an important position within the criminal justice system of the United States. Nowadays, the majority of the criminal cases are resolved through plea bargaining rather than going through the traditional process of trial. If the government possesses a strong case, it may extend a plea deal to the defendant as an option to bypass the trial. This helps in enhancing the efficiency of the legal process as well as the legal system, reducing court congestion, and regulating costs. 

Plea bargaining in the United States has a compelling history, growing from informal negotiations to a well-established system that currently serves as a fundamental aspect of the American criminal justice system. On one hand, supporters are highlighting its efficiency, and on the other hand, critics are expressing concerns about its impact on justice and fairness; thus, this practice continues to generate significant debate even after it is popularised throughout the nation.

India

Historical context in India

India has a rich legal history covering the ancient and medieval eras, characterized by a wealth of legal practices. These periods saw the widespread usage of methods such as arbitration and mediation, which were widely employed for resolving disputes, bypassing the need for lengthy court trials, and so on. Under British colonial rule, India’s legal system went through substantial transformations by adopting components of British common law. However, the formal practice of plea bargaining, as observed in modern times, was not present in the colonial legal system. Although there have been historical instances that can be labelled as plea bargains, the modern concept only emerged in the 19th century, having traces in American Judiciary.

India did not feel the need for plea bargaining due to the presence of the jury system until the 1960s, when legal representation was permitted.

Then, in the year 1991, the 142nd report of the Law Commission of India was released, which mooted the idea of ‘concessional treatment’ of those who plead guilty on their own volition but was careful to underscore that it would not involve any plea bargaining or “haggling” with the prosecution. It made its recommendation based on the efficacy of the American model. The report further stated that such a practice is consistent with both the Constitution and the Fairness Principles. It further addressed coherent contentions and further conducted a survey, which established that the majority of the legal community was in favour of such practice.

The Law Commission, in its subsequent reports as well, underscored the need for such a practice. In its 154th report in 1996, it called for having a remedial measure for the timely disposal of trials for the betterment of under-trial prisoners.

Then in 2001, in its 177th report, the need for the concept of plea bargaining was reiterated. And in 2003, the Justice Malimath Committee suggested reforms to the criminal justice system and endorsed various recommendations of the Law Commission with regard to plea bargaining.

The question of plea bargaining’s legitimacy and constitutionality was then settled in case State of Gujarat v. Natwar Harchandji Thakor, (2005), the court recognised the value of plea bargaining and that each “plea of guilt”, which is considered to be part of the process of a criminal trial, should not be assessed factually but rather evaluated on a case-by-case basis. 

Introduction of plea bargaining in India

In an attempt to streamline the judicial system and reduce the burden on India’s overloaded courts, the implementation of plea bargaining was officially introduced. Its main objective is to provide an opportunity for the accused individuals to willingly admit their guilt in exchange for a reduced charge or sentence. Initially, plea bargaining exclusively applied to certain types of offences, particularly those carrying shorter sentences, such as minor misdemeanours, but as time goes on, its ambit goes on expanding.

Implementation and challenges

Despite being introduced into Indian legislation, the execution of plea bargaining has encountered hurdles time and again. Factors such as cultural influences, socio-economic circumstances, and a lack of knowledge among the accused individuals have all played a role in hindering its acceptance. The effectiveness of plea bargaining relies on the discretion of the prosecutors and the judges, as well as the willingness of both parties to engage in a negotiation.

Present-day situation

Currently, plea bargaining remains an integral part of India’s criminal justice system, primarily utilised for speeding up trials and alleviating the court’s caseload in cases which are related to minor offences. Its impact on case resolution has been diverse, resulting in some instances being swiftly and efficiently resolved through this mechanism.

Types of plea bargaining

There are numerous forms of plea bargaining, and each of its forms has its nuances, which can be employed depending on the circumstances of each case. A few of them are as follows:

Charge bargaining

This is the form of bargaining in which the defendant agrees to plead guilty to the offence in exchange for a lesser serious charge than the one initially filed by the prosecution, in which there were much more serious charges. This kind of bargaining is permissible in cases where the maximum punishment is imprisonment for seven years or less.

Sentence bargaining

In this form of bargaining, the defendant or the accused agrees to plead guilty to the offence on the original charges filed by the prosecution in expectation of receiving a lesser sentence than they might receive if convicted at the trial.

Fact bargaining

This form of bargaining is generally not favoured by the courts, as it is considered to be against the criminal justice system. It involves an agreement between the defendant and the prosecution where they both agree on specific facts or evidence that will be presented or omitted at the trial. This way, only a particular set of facts is presented to the court. This could affect the strength of the case, and there are chances that a more favourable outcome would come in favour of the defendant.

Count bargaining

In this form, the defendant pleads guilty to only some charges filed by the prosecution, while others are dropped. This is mainly prevalent when someone is facing many charges and thus agrees to admit only a few of them to avoid more serious consequences.

Alford plea

Under this plea, the defendant maintains his innocence but also admits that the prosecution has enough evidence that is likely to secure his conviction. This way, the defendant makes a plea deal without explicitly admitting his guilt. Thus, the defendant here is able to maintain his innocence in the eyes of the court.

No contest plea

This is a form of plea where the defendant neither admits his guilt nor denies it. This plea is treated as a guilty plea for sentencing purposes, but it can also protect the defendant, to some extent, from civil liability because they have not admitted their fault.

These are some types of plea bargaining that offer defendants and prosecutors flexibility in negotiating the outcomes based on the strength of the case, the defendant’s willingness to accept its responsibility, etc.

Legal provisions that provide for plea bargaining

As mentioned above, under the CrPC, there is a special chapter that was added in 2005 to introduce the concept of plea bargaining in the Indian legal system. In total, there are 12 provisions that explain and cover the whole process of plea bargaining, which are discussed in detail below:

Application of the Chapter

Section 265-A explains when the concept of plea bargaining would come into picture. According to this section, plea bargaining can be made where a report under Section 173 of the CrPC is made or a magistrate has taken cognizance of an offence. After examining the complaint under Section 200 of the CrPC, he issues the process under Section 204 of the CrPC for the offences that are punishable with less than seven years of imprisonment. But this plea cannot be taken in the case of offences that affect the socio-economic condition of the nation or that are committed against a woman or a child under 14 years of age. And the Central Government shall establish the crime under the current applicable legislation that will impact the socio-economic status of the country. 

Application for plea bargaining

Section 265-B says that the person who wants to avail of this plea has to file an application in court in which the trial for such an offence is pending. In the application, the defendant has to tell his case in brief, and along with the application, an affidavit has to be attached in which he has to swear that he is filing this application willfully and after understanding all the consequences of taking this plea. Also, the defendant has to mention that he has not been previously convicted by a court in a case in which he had been charged with that same offence.

After receiving the application, the court will issue notice to the complainant or to the public prosecutor, as the case may be, and the accused has to appear on the date fixed for the case. After this, when everyone appears for the case, the court shall record the statement of the accused in front of a camera where the other party is not present to satisfy itself that the accused has filed the application voluntarily. Once the court is satisfied that the accused has filed the plea voluntarily, it can ask the party to go for a mutually satisfactory disposition where the victim is compensated by the accused, and then a date is fixed for the next hearing. But if the court thinks that the application was not filed voluntarily or that the accused has been previously charged for the same offence, it shall proceed further in accordance with the procedure of the Code of Criminal Procedure from the stage where such an application was filed.

Guidelines for mutually satisfactory disposition (MSD)

As per Section 265-C, where the court is satisfied that the application of plea bargaining was filed voluntarily under a case instituted on a police report or otherwise than on a police report, the court shall issue notice to the parties and, where required, to the public prosecutor and police officer to participate in the meeting and do a MSD. Throughout this process, the court has the duty to ensure that the parties in the meeting are working voluntarily. The court is under the duty to ensure that the parties are voluntarily participating in the whole process, and if the accused or the victim wants, they can participate in the meeting along with their pleader.

Report of the mutually satisfactory disposition (MSD) to be submitted before the court

Then as per Section 265-D, where the MSD worked out successfully, the court has to prepare a report of such a disposition, which will be signed by all the persons present in that disposition along with the presiding officer of the court. But if the MSD didn’t work out, the court has to record its observations and then proceed further with the case in accordance with the provisions of the CrPC from the stage where the application of plea was filed.

Disposal of the case

When there is a satisfactory disposition of the case under the previous section, the court shall under Section 265-E proceed by awarding compensation to the victim as per the disposition arrived at and, at the same time, hear the parties on necessary things like the quantum of the punishment. Then, if the accused falls under the purview of Section 360 of the CrPC or under the Probation of Offenders Act, 1958, or any other law, he may be released on probation to provide for the benefit of any such law. Then the court will see that if there is any clause for the minimum punishment for that offence, then the court will sentence the accused to half of the minimum punishment for that offence. And in certain cases, the sentence is made one-fourth of the punishment provided or extendable, as the case may be, for that offence.

Judgement of the court

In regard to the terms of the previous section, the court as per Section 265-F has to deliver its judgement in the open court, and the same shall be signed by the presiding officer of the court.

Finality of the judgement

The judgement provided by the court will be considered final as per Section 265-G. And no appeal can lie in any court against such a judgement except the Special Leave Petition (SLP) under Article 136 of the Indian Constitution or the writ petition under Article 226 and Article 227 of the Constitution.

Power of the court in plea bargaining

In accordance with Section 265-H, the court shall possess all the powers that are necessary for fulfilling its responsibilities under this chapter, including those related to granting bail, conducting trials for offences, and handling other matters related to the case resolution as prescribed by this Code of CrPC.

Period of detention undergone by the accused to be set off against the sentence of imprisonment

As per Section 265-I, the role of Section 428 of the CrPC shall apply in this case, and the time period of detention already undergone by the accused shall be set off against the sentence of imprisonment imposed. This will work in the same manner as it applies in respect of imprisonment under other provisions of this Code.

Savings

As per Section 265-J, the provisions stated in this Chapter shall remain valid regardless of any conflicting provisions found in other sections of this Code, and no interpretation of the provisions in this Chapter shall be limited by any of the aforementioned conflicting provisions. And for the purpose of this Chapter, the term “public prosecutor” shall have the same meaning assigned to it under clause (u) of Section 2 and shall also include an assistant public prosecutor designated under Section 25 of the CrPC.

Statements of the accused not to be used

In accordance with Section 265-K, the statements or facts that were stated by the accused in the application filed by him regarding plea bargaining shall not be used for any other purpose except for the purpose of this chapter. 

Non-application of the chapter

As per Section 265-L, nothing in this Chapter shall apply to any juvenile or child as defined in clause (k) of Section 2 of the Juvenile Justice (Care and Protection of Children) Act, 2000.

Benefits of plea bargaining

Benefits to the defendant

• A major reason why a person prefers to accept his guilt under the plea bargaining concept is that he believes that by accepting the charges and making a plea, he will be given some relief in the punishment, and there could be some chance that he will, even if given punishment, not be given the maximum that is prescribed for that offence. And even if the sentence is not reduced, he may get punishment for some less severe charges.
• This is no hidden fact that even after numerous reforms in the judicial system, a common man still has to face many troubles. So instead of getting crushed in the system and facing stress and anxiety, a person prefers to quickly finish the trial by accepting his guilt and making a plea bargain along with it.
• By making the plea, a guilty person no doubt still has to face some punishment, but that is comparatively less than what he would often have to face. And this brings the possibility of maintaining his family ties and fulfilling his obligations towards his family.
• Because of the quick completion of the trial, the news regarding facing the trial by the defendant will not widely circulate in the society, and thus the person has to face less stigma from the society. This is often used to avoid publicity and getting embarrassed.
• Another benefit a defendant finds is that either he chooses to go with a complete trial or shortens the trial by accepting his guilt. He has to pay the necessary expenses involved in the case and devote the time to complete the court proceedings; thus, he prefers to choose the latter option and get some relief this way.

Benefits to the attorney

• The prosecutors (victim side attorney appointed by the state) as well as the defence attorney, by making the defendant agree to plead guilty, reduce their caseload and save their time in preparing for the upcoming matters. This way, they could focus on other more severe offence cases pending with them as well as get some time for themselves.
• The prosecutor’s conviction rate is also improved if the defendant agrees to accept his guilt.
• The resources of the attorney’s, which otherwise would be involved in completing the trial, are also saved and can be devoted to other cases to dispose of them more quickly and efficiently.

Benefits to the judges

• The trial gets shortened by accepting the charges, which saves the time of the judges as such cases are quickly disposed of.
• Through quick disposal of the cases through plea bargaining, the caseload of the courts is also reduced. This makes the per judge case pendency ratio less, which would improve their efficiency as they could focus on other severe offence cases with adequate time.
• Instead of putting the resources for investigating the matter, managing and organising documents, etc., the court can divert such resources into other serious offence cases whose trial is needed to be completed more urgently.
• By accepting the guilt and making a plea of bargaining the sentence or charge, the defendant closes his doors to making the order change or reversed in the appeal stage. He cannot, in an ordinary manner, go to a higher court to set aside his punishment because he himself accepts his guilt. Although he has other remedies to deal with this issue, because of the limited scope for appeal, the higher judges will have to deal with a comparatively smaller number of cases, which will come from the subordinate courts.
• The judge, along with the attorney, shares the responsibility of determining the guilt as well as the sentence that can be imposed on the defendant once he makes a plea of bargaining his sentence by accepting his guilt.

Benefits to the victim

• If the attorney’s are successful in making the defendant ready to accept his guilt either through the plea bargaining process, which could lessen his sentence, the victim will be relieved of the anxiety about whether he will get justice or not, as the defendant in such a case will be declared guilty with certainty if other circumstances also align with it.
• The victim had to undergo mental stress, trauma, and anxiety during the court proceedings, but if the defendant chooses the path of plea bargaining, the victim will also get some relief from all this stress. Sometimes people prefer their mental peace more than getting the accused punished for the wrong done by him.

Benefits to other classes of persons

• The work burden of the police officials also gets reduced, as otherwise they would be involved in all such court proceedings and wouldn’t get enough time to maintain law and order on the ground level.
• The time a guilty or accused person spends in jail puts an additional burden on the jail authorities. Thus, spending less time in jail will also be beneficial for jail staff and management.
• Along with it, the more time a person spends in jail, the higher are the chances that he will indulge in such wrong-minded people, and once he gets out, he will get involved in a bigger crime. Thus, releasing the person at an appropriate time is sometimes beneficial. 
• Believing in the reformation of the offenders, they are sent to rehabilitation centres, which are run by the state or centre, and to make them run, the money of the taxpayers is used. Thus, by accepting the guilt and making a plea to lessen his sentence, a person acknowledges his mistake and wants a chance to improve himself. This in itself is a reformation, and thus fewer people will be needed to be sent to the rehab centres.

Potential disadvantages of plea bargaining

• By making a plea of bargaining, the accused no doubt accepts his guilt, and he even gets punished for his wrong, but many times it is seen that the accused often escapes to get a reasonable punishment, which results in no much improvement in his behaviour. Also, plea bargaining can result in the accused person avoiding accountability for their actions, as they are able to plead guilty to a lesser charge without having to go through a trial. This is a form of leniency that may not be justified in some instances. 
• In most cases, the victim is a common person who does not know his rights, and if he doesn’t get a good attorney who could give him better advice, the decisions he makes will affect him as well as society in the long term. So it is always advisable to go for a good advocate. The guilty person may, after coming out without facing a proper sentence, try again to attack the victim.
• By pleading a sentence, the process of an ordinary trial need not be complied with. This results in quickly completing the trial, but the downside of this is that the constitutional right of the victim to get a complete trial is affected. This depends on the will of the person as to whether he is satisfied with the decision of the court in which plea bargaining was made or he wants more strict punishment for the offender by going through a complete process, which will be difficult for the defendant to comply with.
• By accepting guilt even under plea bargaining, the defendant will be considered to have a criminal record, which could be problematic for him in the future. Moreover, he also has to pay the required costs until the trial is completed.
• By pleading guilty to a lesser charge, the accused person is giving up their right to a fair trial. This can be problematic if the accused is innocent and is pressured into pleading guilty to avoid the risk of a harsher sentence at trial.
• In cases of plea bargaining, the judge has a major role in finalising whether the accused plea is to be entertained or not. There are various factors that determine it, such as the nature and gravity of the offence, the role of the accused in the commission of the crime, the needs of the victim, and the public interest.
• There are chances that the accused is made to choose the route of plea bargaining by misrepresenting its benefit, and because there are fewer chances for the victim to appeal in such cases, the victim has to face punishment even if he is innocent in reality.
• The clean record of a person who is made to face a sentence in one or another case gets tarnished, because of which the person might lose his job or find difficulty looking for a new job. During that time, the person is also unable to fulfil his domestic obligations. 
• The victim, in the hope of having the accused punished to the maximum possible extent for his wrong, feels cheated by the attorney, who tries to make him understand the concept of plea bargaining. A common man, in his emotions, doesn’t understand the workings of the system much and just wants to grill the wrongdoer for his wrong. But unfortunately, this is not how the system works.
• Some critics also claim that this concept of plea bargaining violates Article 20(3) of the Indian Constitution, which prohibits self-incrimination.

Landmark case laws

Re: Policy Strategy for Grant of Bail (2022)

The Supreme Court of India, in this recent judgement, has laid down various guidelines for the disposal of the cases, introducing concepts like plea bargaining, compounding of offences, and the application of the Probation of Offenders Act, 1958.

Murlidhar Meghraj Loya v. State of Maharashtra (1976)

While this particular case does not directly address plea bargaining as a formal legal procedure, it does indirectly highlight certain facets of negotiation and expectations of leniency that can be linked to plea bargaining. Notably, this marked the first case in which the Supreme Court of India acknowledged the concept of plea bargaining. The court recognised that although the concept of plea bargaining is absent from the Code of Criminal Procedure, it stressed its potential usefulness in appropriate situations for the efficient and expeditious disposal of criminal cases.

Kasambhai Ardul Rehmanbhai v. State of Gujarat (1980)

The Apex Court ruled in this particular case that plea bargaining is contrary to public policy. Furthermore, it expressed dissatisfaction with the magistrate’s decision to accept the plea bargaining of the accused.

State of Uttar Pradesh v. Chandrika (2000)

In this case, the Apex Court disparaged the concept of plea bargaining and held this practice as unconstitutional and illegal. The court determined that the primary objective of this concept was to accelerate the resolution of cases and relieve the strain on the judicial system, emphasising that it should not be utilised as a means to allow the guilty to avoid punishment.

Conclusion

Plea bargaining has a vital role as well as a valuable tool in the Indian criminal justice system. It serves as a means of negotiation between the prosecution and the accused, allowing for the possibility of a mutually beneficial agreement that presents an alternative resolution to criminal cases, promotes efficiency in the courts, and preserves judicial resources. Plea bargaining can help expedite the legal process and provide a fair and efficient resolution to criminal matters. However, it is also essential for the judges also to exercise their discretion judiciously and wisely when approving plea bargains, taking note of the gravity and seriousness of the offence, the interests and needs of the victim, and the impact on the administration of justice. Taking these factors into consideration, the judges can ensure that plea bargaining contributes to the fair and efficient resolution of criminal cases while maintaining the integrity of the legal system. Thus, just like every coin has two sides, this tool of plea bargaining also has two sides, positive and negative. The outcome will depend totally on which side is able to prove its points more strongly in front of the court. Thus, this tool is to be used judiciously with careful caution, keeping in mind the interests of the public.

Frequently Asked Questions (FAQs)

Is there any difference between plea bargaining and confession?

While plea bargaining and confession both involve the admission of guilt by the accused, the main distinction resides in the context and procedure. Plea bargaining is a negotiated settlement, whereas in confession there is an unambiguous acknowledgement of responsibility without any potential for negotiation or willingness to compromise or make concessions. Additionally, a confession can be used as evidence against the accused in court, while a plea agreement achieved through plea bargaining before implementation necessitates approval from the court.

What differentiates plea bargaining from probation and parole?

Plea bargaining is a pre-trial negotiation process, whereas probation is an alternative to incarceration for convicted offenders, and parole is the supervised release of prisoners before their full sentence is served. Each serves a different purpose within the criminal justice system.

Is plea bargaining actually the correct tool for every person?

Despite the numerous advantages that plea bargaining offers, determining whether it is the right decision for every case can be a challenging and complex task. By consulting and taking guidance from a skilled legal expert or professional, one can gain valuable insight into the likelihood of winning during a trial and evaluate the potential consequences of a judgement against oneself.

References

• https://www.indiatoday.in/law/story/cases-pending-in-courts-cross-rs-5-crore-mark-law-minister-in-rajya-sabha-2409541-2023-07-21 
• https://blog.ipleaders.in/plea-bargaining-practice-india/ 
• https://www.britannica.com/topic/plea-bargaining/Benefits-of-plea-bargaining 

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This article has been written by Ziya ur Rahman Karimi. This article comprehensively talks about internal trade, its definition, categorisation, and challenges, and why it is all-important to the development of a nation. It explores the Government of India’s efforts to promote internal trade, the effect of the pandemic on internal trade, and the difference between internal trade and global trade.

Introduction

Trade is an age-old practice that has contributed immensely to the growth and progress of human civilisation. Trade has helped in shaping societies and even connecting various societies together. The exchange of goods and services, whether within a country or cross-border, is definitely a testament to our ability to work together, adapt, and improvise.

International trade has assumed a prominent role in modern society. But we must not forget about an equally important topic, i.e., internal trade. To understand the importance of ‘internal trade’, one must understand what trade is and why it is so relevant. In this article, we are going to understand the same. 

What is trade

At its core, trade is the exchange of commodities between two parties. Trade embodies the act of exchanging something one possesses for something one desires. This fundamental concept is what lies at the heart of economic transactions and human interaction. Trade has several elements, such as goods and services, buyers and sellers, transactions, etc. Trade can be seen occurring in various forms, from the barter system of early civilisations to the modern, complex financial system. The history of trade and the progress we have made are testaments to our ability to connect, cooperate, and evolve. 

Historical perspective

The practice of trade can be found deeply mixed with the history of human civilisation. It can be traced back to the earliest societies that engaged in the barter system. A barter system is a system in which the direct exchange of goods and services is done without a medium for exchange, such as money. Such a system usually requires a party to have a commodity in excess and pay exchanges for the items that they are in need of. This simple act of exchange laid the roots for the complex trading economic system that we have today.

Historically, there were many important trade routes that were important for the exchange of commodities. The most eminent examples of trade routes are the ‘Silk Road’ and the ‘Spice Route’. The Silk Road, which was established in 130 BCE, connected the ancient civilisations of China and the Roman Empire. It acted as a cultural bridge that introduced new religious technologies and customs between the East and the West, and most importantly, it was used in the exchange of wool, silver, and gold from Europe. Later on, the Persians and the Greeks expanded the Silk Road from Turkey to India. The spice route was another major trading route that was a sea route from Japan to Europe, passing through the Indonesian islands, India, the Middle East, and the Mediterranean, and was mostly used for the trading of spices.

In today’s world, the barter system is no longer prevalent, as money has replaced it as a medium of exchange for commodities. It is due to various reasons, the most important of which is that it was far more feasible to exchange commodities than to find people who were willing to exchange surpluses.

Essence of trade

Trade can be easily understood as the buying, selling, or exchanging of goods or services between two consensual parties. The essence of trade has been explained under the following headings:

Goods and Services

Trade includes the exchange of both goods and services. Goods include products, both tangible and intangible. Tangible goods such as clothes, food, houses, cars, etc. can be felt physically, while intangible goods include apps, software, patents, etc. Services, on the other hand, include a lot of activities such as healthcare, education consultations, etc. The list is never-ending, and such diversity in goods and services reflects the vastness of human needs and desires.

Buyers and sellers

Trade involves two parties: buyers and sellers. The buyer seeks to purchase or acquire goods and services to satisfy their needs or desires, while the seller offers these goods and services in exchange for remuneration, which is usually money. Trade can take place at various levels, from individual transactions to between two states, two countries, or a group of countries.

Transactions

These are the actual exchanges that take place in trade. It is usually in the form of a transfer of ownership of goods or the delivery of services in return for some form of payment. The form of payment can vary from cash purchases to credit transactions to digital payments in today’s world, facilitated by modern technology.

Thus, it can be clearly said that the essence of trade is the exchange of goods and services between two or more parties. This is an important aspect of  economic activity as it allows individuals to acquire products that they can’t produce themselves.

Trade also improves the efficiency of resource allocation and specialisation. Through trade, resources are diverted towards their most efficient use to obtain maximum productivity. For example, in India, the state of Uttar Pradesh is rich in agricultural land. It is much more efficient to allocate resources and specialise in agriculture in the state than to do mining. The state can also export agricultural products to other parts of the country where there is a lack of fertile land, such as Rajasthan. In return, it can import other goods from states that produce them more efficiently. Such resource allocation through trade optimises production and ensures that the resources are not wasted. It allows a country to use its resources at maximum productivity so that it can have an advantage over others at what they do best.

What is internal trade

Internal trade refers to all the economic activities that take place within the boundaries of a country. According to the National Council of Educational Research and Training, internal trade is the buying and selling of goods and services within the boundaries of a nation. Whether the products are purchased from a neighbourhood shop in a locality, a central market, a mall, or even from any door-to-door salesperson or from an exhibition, all these are examples of internal trade as the goods are purchased from an individual or establishment within a country. For this reason, it is often referred to as domestic trade.

It covers all the buying and selling of goods and services among individuals, business houses, corporations, and all other entities operating within a nation. No customs duty or import tax is levied on such trade, as goods and services exchanged are part of domestic production and are meant for domestic consumption. This type of economic exchange is fundamental to a nation and plays a pivotal role in shaping its economic landscape. It is the lifeblood of a nation’s economic prosperity.

The scope of internal trade is vast, as it covers all the economic activities within a nation, ranging from small-scale retail transactions to large-scale wholesale exchanges. All the movement of goods and services within a country is included within its scope. It is generally categorised into two categories: retail trade and wholesale trade.

Retail trade

Retail trade is the most visible aspect of internal trade for the common man. It involves the sale of goods directly to the end consumer. Goods are sold in businesses like local shops, supermarkets, grocery stores, malls, e-commerce platforms, etc. The retailer serves as an intermediary between the wholesaler and the consumer. He provides services such as the publicity of goods to wholesalers and makes products easily accessible to consumers.

Wholesale trade

Wholesale trade involves the buying of goods directly from the manufacturer and then reselling them to retailers, where they are eventually sold to end consumers. Wholesalers generally purchase goods in bulk from the manufacturer, store them, and then resell them to the retailer. They play a crucial role in the supply chain, ensuring a steady flow of products to retailers.

There is also one other important aspect of trade, i.e., the intermediaries. Intermediaries like distributors, agents, and brokers facilitate the internal trade and make the process run smoothly by connecting buyers and sellers. They often work in and specialise in specific sectors and assist in marketing, negotiations, and logistics.

Differences between internal trade and international trade

Importance of internal trade in the economic development of a nation

Internal trade plays a pivotal role in a nation’s economic development in several ways. Significant ones are discussed below:

Economic growth

Internal trade contributes significantly to our nation’s development and economic growth. It contributes significantly to the nation’s gross domestic product (GDP). It does so by promoting economic activity, creating jobs, and generating revenue.

Market access

It provides consumers with easy access to a wide range of goods and services, encompassing their every need and desire and thereby enhancing their quality of life and consumer choices.

Industrialisation

Internal trade supports the growth of industries in a country. Through efficient resource allocation, it ensures smooth and proficient distribution of raw materials, intermediate products, and finished goods within a country.

Regional development

It helps reduce economic inequality by promoting specialised economic activities most suitable to various regions of the country. Thus, ultimately resulting in a balanced development.

Entrepreneurship

Internal trade encourages entrepreneurship and the establishment of small and medium sized enterprises (SMEs). India has witnessed tremendous growth in these in the past few years. They create business ownership and growth.

Government revenue

The taxes that are levied on internal trade transactions generate a whole lot of revenue for the government. In India, Goods and Services Tax (GST) is the main tax levied on such transactions. The revenue generated can be reinvested in infrastructure projects, healthcare, education and other sectors of public welfare.

Categorisation of internal trade

Internal trade can be categorised into two types: wholesale trade and retail trade.

Wholesale trade

Wholesale trade is a crucial aspect of internal trade. We have discussed it briefly before, but now let’s discuss it in detail. Wholesale trade serves as an intermediary link between the manufacturer and the retailer. It involves the purchase of goods in bulk quantities from the manufacturers and then subsequently selling them to retailers. Wholesale trade operates at a scale that allows for large-scale economies to grow. It plays a pivotal role in the efficient distribution of products.

Functions of wholesale trade

Wholesale trade performs a large number of functions, including transportation of goods, storage, marketing, etc. We can divide them into the following:

Services to manufacturers and services to retailers

Wholesalers usually take small quantities of orders from a large number of retailers. Then they, in turn, place a large order with the manufacturer, which facilitates large-scale production of commodities. And thereby take advantage of the economies of scale.

Bearing risk

The wholesale dealers usually take goods in their own name. They take the goods from the manufacturer and store them in their godowns or warehouses. In this process, they bear the risk of fire, spoilage, a fall in prices, etc., which would otherwise have to be borne by the manufacturer. They relieve the manufacturer of such risks so that he can focus on production only.

Financial assistance

The wholesalers generally provide payment in cash to the manufacturer so that production keeps on continuing. At times, they even pay a lump sum of money in advance so that the manufacturer may be able to produce a whole lot of products in time.

Expert advice

At times, the manufacturer is cut away from the consumer’s emotions. It is the wholesaler who is in contact with the market, and he provides important information to the manufacturer, such as customer preferences, market conditions, competitive activities, etc.

Help with marketing

The wholesaler takes orders from retailers spread across a large geographical location. This helps in the marketing of the manufacturer’s product, relieves the manufacturing cost, and allows the focus to be on production.

Storage

The wholesaler takes delivery of goods after they are produced in the factory. Then they store the products in their godowns or warehouses. They bear all the risks of falling prices, fire, spoilage, etc., thereby reducing the burden on manufacturers.

Facilitate production continuity

Wholesalers facilitate the continuity of production by purchasing the products all year long, reselling them to consumers, and thereby creating more demand.

Services to retailers and availability of goods

The retailer usually maintains small quantities of stock of various commodities. When their stocks are depleted, the manufacturer is always ready with more stock in their warehouses for their purchase. It helps the retailer avoid keeping a large inventory and collecting goods from several manufacturers.

Marketing support

It is the manufacturer who advertises the product and does all the marketing, and this in turn helps the retailers sell more of the product.

Grant of credit

The manufacturer usually purchases from the producer in cash, but they also extend credit facilities to their regular retailers. This helps retailers manage their businesses with a relatively small amount of working capital.

Specialised knowledge

Retailers usually deal in a varied range of products, whereas manufacturers deal in a small sector of products. They develop specialised knowledge over the years of working in that sector and then pass down the knowledge to the retailers, which is very beneficial. They tell the retailers about new products, their uses, quality, prices, allocation of shelf space, the decor of the outlet, etc.

Risk sharing

The manufacturer purchases the product in large quantities and sells it to the retailer in small quantities. This helps the retailers avoid the risk of large storage, the risk of fluctuating prices, etc.

Retail trade

Retail trade is the final link in the supply chain that connects the products to the end consumer. It involves the sale of the goods ultimately to the end consumer, usually for personal consumption. They can be seen in the form of itinerant retailers, departmental stores, malls, general stores, local shops, vendors, door-to-door salesperson, etc. It adds an intermediary link between the wholesaler or manufacturer and the consumer. They play a pivotal role in making the product easily accessible to the general public.

Functions of retail trade

The retail trade performs a number of functions. They can be divided into the following:

Services to wholesalers and services to consumers

The most important service, which is the final sale of products to the end consumer, is done by the retailer. Retailers are generally scattered in a large geographical area, thereby helping in the distribution of goods in a large area.

Personal selling

The retailers are the ones who personally sell to the end consumer. The manufacturer and the wholesaler are not seen by the general public, but it is the retailer who undertakes personal selling efforts and relieves the other two of actualizing the sale of products.

Enabling large-scale operations

The retailer sells the product in small quantities to a large number of people. This relieves the manufacturer and wholesaler of making individual sales to the consumer in small quantities and focusing on large-scale production.

Collecting market information

As the retailer remains in constant contact with the consumer, he provides more reliable information to the manufacturers and wholesalers about market emotions, trends, preferences, and the attitude of customers.

Help with promotion

Manufacturers and wholesalers from time to time carry out promotional activities such as free gifts, discounts, coupons, lucky draws, etc. Retailers participate in these activities to benefit customers and, thereby, help in the promotion of the products.

Services to consumers and regular availability of products

The most important function that retailers provide to consumers is the regular availability of products. The consumer is not able to travel long distances to different wholesalers to get these products; they should be readily available with the retailers in their area. This helps consumers buy the products they need.

New product information

Through personal selling efforts and by arranging for effective display of products, the retailers provide information about the new products to the customers. They make the customers aware of the product’s arrival date, uses, price, special features, etc. This helps in the decision-making process of the consumer.

Convenience in buying

As the retailers are situated in the neighbourhood of the consumer, they provide the real convenience of buying goods from the consumers as and when they desire.

Wide selection

Retailers generally store a small stock of a variety of products, thereby giving consumers a wide selection of products to choose from. This helps the consumer choose the best product out of the wide selection of goods.

After-sales services

After-sale services such as home delivery, arrangement of spare parts, and attending to customer complaints are done by the retailers, as they are the ones who are in direct contact with the consumer. This becomes an important element in the consumer’s choice to purchase the same product again.

Provide credit facilities

Retailers also provide credit services to their regular customers, which increases their level of consumption and thereby their standard of living.

Evolution of retail trade

In the past few decades, the traditional system of retail trade has undergone a drastic transformation. This transformation is driven by technological advancement. Now, retail trade can be seen in two formats:

Brick and mortar retail

It refers to the traditional style of retail, which includes physical stores. In these stores, consumers can come and browse products according to their needs. They can choose from a variety of products, feel them physically, make purchases on-site, and receive the product immediately. These stores can range from huge department stores to local shops. Often, the retailer undergoes personal selling effort, sensory engagement, and face-to-face customer service to help the consumer choose the best product according to their needs. These stores are still thriving, but the rise of e-commerce has drastically changed the industry.

E-Commerce

E-commerce stands for electronic commerce, and it involves the selling of goods online over the Internet. It has witnessed exponential growth over the past few decades due to the easy accessibility and convenience of the Internet. They provide you with a wide variety of products to choose from just by scrolling on your device while sitting at home.

E-commerce platforms like Amazon, Flipkart, and Meesho have changed the Indian retail trade. They provide you with a vast variety of products 24/7, including doorstep delivery, cash on delivery, etc. You can make purchases anytime, anywhere, providing a lot of convenience and avoiding the hassle of going to a physical store. Nowadays, even groceries can be delivered online in under 10 minutes on platforms such as Blinkit. All these features have revolutionised the retail trade industry, making them a dominant force.

Role of Micro, Small, and Medium-sized Enterprises (MSMEs) in retail

Over the years, micro, small and medium-sized enterprises (MSMEs) have played a pivotal role in the retail sector of trade. Owing to its importance, the Government of India has also launched various schemes to help the MSMEs in the country. The most important of which is the Emergency Credit Line Guarantee Scheme (ECLGS), which has delivered additional credit to more than 130 lakh MSMEs. Some reasons that contribute to its diversity and dynamism are:

Niche marketing

MSMEs usually specialise in niche markets and unique products. They cater to a specific line of consumers looking for specific products according to their preferences, which may not be met by large retailers. Examples of such markets can be Khadi materials and products, handicrafts, etc.

Local presence

Many MSMEs are locally owned and operated. They operate in the locality and help develop a sense of local identity and community development.

Innovation

MSMEs can be really adaptive and agile in adapting to new market trends. They adopt innovative retail strategies to respond to changing market trends and consumer demands.

Job creation

They create a significant number of jobs for the local people, thereby increasing local employment and economic stability.

Entrepreneurship

It provides a great and accessible platform for entrepreneurs to start their entrepreneurial journey and grow their businesses. Play often fosters entrepreneurial spirit and innovation in the retail sector.

Intermediaries in internal trade

Intermediaries are a critical component of internal trade. They are also known as middlemen. They are usually independent and help facilitate the movement of goods and services from producers to end users. They connect buyers and sellers and perform various functions to streamline the trade process. They are not manufacturers, wholesalers, or retailers, but they help them efficiently manage the trade process. Distributors, agents, brokers, etc. are all examples of intermediaries.

Distributors and agents

Distributors

The distribution of goods is a fundamental function of the trade process. The distributor plays a vital role in this distribution process. The distributor purchases goods from the manufacturer, or wholesaler, and supplies them to the retailer and even sometimes to end consumers. They often have a well-established distribution network, allowing them to transport goods to various locations of sale. They provide a vital link in the trade process, ensuring that the products are readily available to consumers.

Agents

Agents act as intermediaries on behalf of either the buyer or the seller. They connect the interested parties in the trade and negotiate, representing one party’s interests. They usually specialise in specific industries or sectors. Using their expertise, they often garner favourable terms and prices for their party. They are also a crucial component of international trade, as they help foreign businesses navigate the local market.

Impact on Efficiency and Accessibility

Intermediaries such as distributors have a great impact on the efficiency of the trade process. Intermediaries help streamline and smooth trade operations by reducing the complexity of the direct transaction between manufacturer and consumer. They specialise in logistics, negotiations, and market knowledge, all of which contribute to making trade more efficient. Distributors have a large network of distribution channels through which they contribute to an efficient supply chain. They buy products from various manufacturers and ensure timely delivery of the same to retailers.

Intermediaries also enhance the accessibility of products due to the large distribution network of the distributors. They can cater to the needs of a large geographical area of consumers. They can even reach distant markets that would otherwise be difficult to reach. They also help foreign businesses navigate the local market efficiently and smoothly. They can help break down regulatory and cultural barriers, expanding their accessibility to the market.

Emerging trends in intermediary services

With the advancement of technology, intermediary services are also evolving. This evolution is fueled by technological advancement, changing consumer behaviours, and global and internal market dynamics.

Digitalisation of intermediary services

With the rapid digitalisation of the world, intermediary services are also digitising themselves. Online platforms are the new marketplaces to connect buyers and sellers for these intermediaries. They also help to expand the market reach to never seen extents.

Data-driven decision making

The increase in data science technology has resulted in intermediaries increasingly using data analytics to make more informed decisions. Market trends, consumer behaviour, supply chain data, etc.—all of these things are thoroughly analysed, and then an output is generated that is used to optimise the services. This results in offering better insights to their clients.

E-Commerce integration

With the advent of e-commerce platforms such as Amazon and Flipkart, many intermediaries have started integrating e-commerce into their services to provide seamless online ordering and delivery.

Globalisation

Globalisation has resulted in increased cross-border trade, which has opened up new opportunities for intermediaries specialising in international trade. They help foreign businesses and firms navigate complex international regulations and customs processes.

Sustainability and ethical practices

Nowadays, there is an increasing demand for responsible consumption by consumers. To meet these demands, intermediaries are increasing their focus on sustainability and ethical practices. They facilitate the production of sustainable products and promote fair trade practices.

How does the Ministry of Commerce promote internal trade

In 2019, the Government of India changed the name of the Department of Industrial Policy and Promotion (DIPP) to the Department of Promotion of Industry and Internal Trade (DPIIT). Earlier, matters of internal trade were under the domain of the Ministry of Consumer Affairs, but now they have been brought under the Ministry of Commerce and Industry. It was done in response to a long-time demand from the Confederation of All India Traders (CAIT), which demanded a separate ministry for internal trade. Retail trade is done by more than 5,00,00,000 businesses in the non-corporate sector and provides employment to over 46,00,00,000 people in India. It contributes to 45% of the national gross domestic product (GDP). The Confederation of All India Traders welcomed the government’s step and said that this step would bring retail trade into the mainstream of the economy.

Role and functions of the Ministry of Commerce

The Ministry of Commerce is responsible for formulating and implementing growth strategies for the industrial sector, along with other socio-economic objectives and national priorities. Established in 1995, the original DIPP was used to oversee industrial policy formulation. After the renaming, in addition to previous responsibilities, the department is now in charge of four new categories of responsibilities. It includes the promotion of internal trade, including retail trade, the welfare of traders and their employees, matters relating to facilitating ease of doing business, and matters relating to startups. Its functions are instrumental in improving the economic growth of the country, ensuring fair competition, and facilitating the efficient flow of goods and services in the country. Some major roles and functions of the Ministry of Commerce in Internal Trade are:

Trade policy formulation

The Ministry formulates trade policies that increase trade in the country and align with the country’s economic goals. They make policies on all aspects, such as levying taxes, import and export regulations, trade agreements, etc.

Regulatory frameworks

Regulation of the industry is a major and vital function of the ministry. Without regulations, big businesses may take advantage of smaller businesses, resulting in monopolies in industries. The ministry oversees regulations related to competition, consumer protection, intellectual property rights, and various other aspects to ensure and maintain a fair and competitive marketplace for everyone.

Market access

India is a vast country with 28 states to ensure market access for products from every region of the country. Is a priority of the ministry. It works to eliminate trade barriers and balance regulations so that goods can be traded to and from every part of the country, thus helping to create a unified national market.

Export promotion

With rapid globalisation and cross-border trade, the ministry also focuses on the exportation of the products that are produced in the country. It supports exports so that the country can be in a trade surplus, which will then in turn generate more employment and increase the value of currency. It promotes this by giving export incentives and trade facilitation measures.

Industry support

Another integral part of the ministry’s work is to collaborate with industry associations such as the Indian Chamber of Commerce (ICC). It helps the ministry understand the industry more specifically and develop strategies accordingly to enhance trade and competition.

Schemes and programmes

The Ministry of Commerce is responsible for various acts, such as the Industrial Disputes Act of 1947. It has also helped the government launch several schemes and programmes to promote internal trade and economic development. Some of such programmes have been discussed in the following:

Make in India

Make in India was an initiative by the Government of India launched in 2014. Its primary focus was to promote India as the preferred global manufacturing location. It is intended to boost the domestic manufacturing sector and also bring investment into the country. It focused on attracting foreign investors and adopted export-oriented growth. It encouraged companies worldwide to develop, manufacture, and assemble products in India. It also provided incentives for investments in manufacturing. Promoting the production of goods within the country is intended to boost internal trade and reduce import dependence on other countries.

Digital India

Digital India was yet another initiative of the Indian government that was launched back in 2015. It was a programme that aimed to make government services available to citizens electronically. Its main goal included improving the existing online infrastructure, increasing Internet connectivity, making the country digitally empowered, and reducing corruption and processing costs while creating inclusive growth in areas of products, manufacturing, electronic services, and job opportunities. It has helped to deliver services to beneficiaries in a transparent and corruption-free manner.

Startup India

Startup India was launched in 2016. It is intended to support the startups in India by providing them loans ranging from 10 lakhs to 1 crore, fast-tracking startup patent applications, a panel of facilitators to help with IP applications, and giving rebates on application filing fees. The government also offered a free online entrepreneurship programme to create a strong ecosystem for innovation and entrepreneurship in the country. This was aimed at driving economic growth and will result in the creation of more jobs. It encouraged entrepreneurship and attracted investment, which resulted in India being the 3rd largest startup ecosystem in the world. According to government reports, the number of startups increased from 452 in 2016 to 84,012 in November 2022.

Atmanirbhar Bharat

Atmanirbhar Bharat translates to ‘Self-Reliant India’. It was a campaign announced by the Government of India that aims to help India recover from the economic impact of the coronavirus pandemic. It was announced in 2020 and aimed to make the citizens of India independent and self-reliant. There were five pillars of the campaign, i.e., economy, infrastructure, systems, vibrant demographics, and demand. It is an improved version of the ‘Make in India’ scheme. The government announced an economic package of Rs. 20 lakh crores for this campaign.

Collaborations with industry associations

Industrial associations are formed to promote their common interests and goals. The Confederation of Indian Industry (CII) and the Federation of Indian Chambers of Commerce and Industry (FICCI) are such examples. Organisations or trade bodies function as the national guardians of trade, commerce, and industry. The Ministry of Commerce actively collaborates with such industry associations and trade bodies. They collaborate to address industry-specific problems and challenges and promote internal trade. It is done by:

Policy advocacy

The Industry Association works closely with the ministry and puts forward the demands of business houses and traders to the ministry. They try to push the ministry to enact laws that would benefit the traders. One such example would be the recent renaming of the Department of Industrial Policy and Promotion (DIPP) to the Department for Promotion of Industry and Internal Trade (DPIIT). This brought internal trade under the Ministry of Commerce. It was done in response to a long-term demand from the Confederation of All India Traders (CAIT).

Capacity building

These collaborations involve capacity-building initiatives, training programmes, etc. All these efforts empower businesses, mostly small and medium-sized, to enhance their competitiveness and contribute to their overall development.

Market access

These industry associations also work closely with the government to secure market access in foreign markets. They tried to resolve trade-related issues in international trade so that efficient and smooth international trade could take place.

Information dissemination

The Ministry and trade associations work together to provide information to businesses, such as market research and industry trade. This, in turn, helps businesses make informed decisions about their operations and investments.

Innovations in internal trade

In the era of the internet and digital technologies, when everything is becoming digitised, internal trade is also reshaping itself in a never-seen digital form. The digital revolution in the world has impacted the way we conduct internal trade. The trades are now becoming more engaging for both consumers and businesses. Some key innovations are discussed below:

Technological Advancements

Digitalisation of business operations

Internal trade has been shifting towards digitalisation for some years now. The businesses and the sellers are opting for digital methods for performing various operations that were earlier done manually. Operations like data handling, data management, inventory management, order handling, payments, and customer relationship management are done digitally. Many software programmes, like Tally Reporters and inventory management systems, are being used for the above purposes. This has streamlined their operations and thus helped the trade grow in other aspects. 

Internet of Things (IoT) in retail

The IoT sensors are introduced in the marketplace for business advancements. These sensors not only keep track of the commodities but also make sure that anything does not go out of stock. These sensors also monitor supply chain insights and inventory safety. With the introduction of IoT technologies, it is made sure that nothing is overstocked or understocked and that the focus remains concentrated on the customer’s satisfaction and needs.

Big data analysis

Many retailers use new technologies like data extraction, data mining, and data analytics to analyse the needs of the user on the basis of the data they receive. This analysis of the data has helped them make a decision about what products are bestsellers. They can also predict the market price and the bestsellers of the upcoming season, which gives them an edge, and they can stay prepared and strategize their trading methods.

The role of e-commerce platforms and digital payments

E-Commerce Platforms 

E-commerce platforms have gained popularity ever since they were introduced in the country. Many e-commerce platforms like Amazon, Flipkart, Meesho, etc. have given rise to the trade since they are easy to use and reliable. The very fact that consumers can buy anything without having to go anywhere makes it a viable choice for them to engage more with e-commerce platforms for shopping.

Not only have these platforms given consumers an edge, but they have also given many businesses and startups a reliable way to reach out to a global audience and sell their services. Many small businesses are taking up online platforms like Amazon, Flipkart, and others to expand their businesses and reach a greater audience.

The blend of shopping with safe payment gateways like Razorpay and easy access to products globally has immensely increased the opportunities for all types of businesses to grow.

Digital payments

Now the payment methods are not only limited to cash, but the emerging new payment gateways like UPI, credit/debit cards, and even contactless payment methods like mobile wallets let you pay even when you do not carry cash. The convenience of the payments has led consumers to rely less on cash. Digital payments have made it more efficient and traceable to make transactions in internal trade.

Supply chain innovations

Blockchain technology

This is a recently developed technology that enables suppliers to keep track of the transactions made by users in a secure manner. All the records recorded are transparent and traceable, which makes it less questionable on the ends of both the users and the suppliers. It is generally used in industries like food, pharmaceuticals, and beverages to trace the origin of the products.

Automation and robotics

Various big businesses and startups with a large audience are using automation and robotics for the purpose of task fulfilment. Tasks like picking and packing of the orders, delivery to the agents, and many more are fulfilled autonomously, which reduces the completion time and the labour cost, making it efficient for the business and cutting out their major expenses.

Demand forecasting algorithms

These algorithms use data mining to work on large amounts of data and predict the patterns of market trends. These algorithms help the suppliers stay prepared for the upcoming seasons and give them market insights in a better way. These algorithms have made the optimisation of the inventors easy to do work with fewer worries.

Sustainable practices and eco-friendly initiatives

Green Packaging

With the increasing concern of the pollution levels in the environment, many suppliers are adopting an eco-friendly way of packaging their products. They use materials which do not harm the environment and are easily reusable or decomposable. Alternatives to plastic bags are introduced in terms of paper bags, which do not harm the environment.

Efficient Transportation

The transport agencies are trying to reduce fuel emissions and package travel costs by optimising the routes to deliver the products at a particular destination. They are using various algorithms in order to save fuel emission and reduce pollution. Many agencies are also providing electric vehicles for the delivery of the products, thus contributing to a greener supply chain.

Circular Economy

This is a new methodology to reduce the consumption of resources. Many companies are opting for this technique. This model encourages manufactures to remanufacture the product, thus reducing the need for new resources. The manufactures redesign the products and help the consumers reuse them.

Sustainable Sourcing

Sustainable sourcing is a way of selecting suppliers who are socially, ethically, and environmentally focused in providing the services. In today’s era of increasing supply chains, many companies are exposed to the risk of lower costs and greater production capacities. These risks may include the possibility of supply disruption, cost volatility, threats to brand reputation, and many more. Therefore, companies are turning themselves in incorporating sustainable sourcing in their supply chain methods to reduce the risks to the companies and meeting the expectations of the stakeholders. 

Challenges in internal trade

Internal trade, as we have seen, is an important aspect of our nation’s economic growth. But there are various hurdles which are faced by traders in internal trade. These hurdles can be regional, industrial, or regulatory. By analysing them, we can find some common challenges which traders face.

Common challenges faced by traders

Market imperfections

Monopoly and oligopoly power

Monopoly and oligopolies are not good for market competition. They are big players which dominate businesses in specific sectors or industries. Industries such as cement, steel, aluminium, etc. are all examples of oligopolistic markets. They dominate the market due to their large presence and influence, and they restrict the small players from entering the market. Due to less competition, they can price their products as they will.

Disparity in information accessibility

The market, no matter how hard one tries, is not a level playing field. There are some big players in the market who can get access to market information earlier than everybody else. This gives them an edge over the others in the market. This disparity in information can also lead others to make uninformed decisions and restrict efficient trade.

Lack of transparency

There is also a lack of transparency in the market. When you go to the market, you can see some products have a full list of ingredients displayed, while others display a few ingredients. Also, a lot of chemicals are hidden under the label of preservatives. Moreover, the marketing gimmicks used by companies make it difficult for buyers and sellers to both determine fair prices and assess the quality of products.

Regulatory hurdles

Complex regulations

The market is subjected to various regulations to avoid monopolies and level the playing field for everyone. But sometimes, regulations governing internal trade can be complex, with a lot of rules and compliances to be followed, which makes it difficult for a businessman to understand. This discourages small businesses from participating in formal trade. Various regulations at the state level can create confusion and administrative burdens for businesses engaged in interstate trade. The government has tried to solve the issue by replacing various state and central taxes with one tax, GST. But still, the problem is far from solved. 

Interstate barriers

India is a quasi-federal nation. States enjoy autonomy and can govern themselves, imposing taxes as they like. But sometimes, due to every state levying their own regulation, it makes it difficult for traders to do inter-state trade. Import restrictions such as taxes and administrative barriers, inadequate infrastructure in some states, and bureaucratic delays are some examples of interstate barriers.

Licences and permits

Obtaining licences and permits for a specific trade can be a real hurdle in the trading process. Due to red tapism and administrative delays, traders often find it difficult to obtain their licences and permits on time. This restricts the trade process. The Indian economy from the 1950s to the early 1990s was also known as the Licence Raj or Permit Raj, due to strict government control and difficulty in obtaining licences and permits. But now the government is putting in efforts trying to minimise the delays and make the system smoother for everyone.

Logistical issues

Transportation challenges

Efficient transport is a critical aspect of internal trade. If the goods do not arrive on time, it results in losses for both the buyer and seller. Poor infrastructure, inter-state trade barriers, high traffic, and high transportation costs can all restrict the movement of goods.

Supply chain disruption

Another major logistical issue is supply-chain disruption. The supply chain can be affected by various factors, such as reduced production due to lack of resources, natural disasters, frequent labour strikes, etc. All these can affect the availability of goods on the market and lead to increased fluctuations in prices and market instability.

Inventory management

Some businesses, due to poor management or unethical practices, understock or overstock their goods. This results in financial losses, fluctuations in prices, increased carrying costs, difficulties in responding to changes in demand, and inefficiencies in internal trade.

Storage

The storage of goods is a vital aspect in the supply chain. If the storage facilities are not well equipped and up to the mark, then it may lead to spoilage, damage, and deterioration of products, affecting the availability of goods in the market.

Impact of technology on traditional internal trade

With the advent of e-commerce, the traditional internal trade model has also transformed. Traders now have to keep up with rising technology to make them relevant in the market. Change always comes with some problems. Some of them are:

Rise of e-commerce platforms

E-commerce platforms such as Amazon, Flipkart, and Meesho have modernised the way shopping is done. It changed the earlier brick-and-mortar style of retail and disrupted the traditional business model. It provides customers with convenience, as they can shop by just sitting at home and scrolling on their device. It is also adapting and improving day-by-day to keep up pace with the changing consumer demands and providing consumers a seamless shopping experience. They provide services such as door-to-door delivery, cash on delivery, and after sale services are also good. This has drawn away customers from traditional physical stores and towards these platforms.

Direct-to-consumer (D2C) models

With the help of these e-commerce platforms, the manufacturers can now directly sell to the consumer. They can bypass intermediaries, the wholesalers, and the retailers, saving a lot of cost for the end consumer and offering them great deals. They can also develop their own e-commerce platforms and sell their products there. This model of sale is known as Direct-to-Consumer (D2C) model. This puts in question the role of wholesalers and retailers in the supply chain.

Changing consumer expectations

Nowadays, shopping is not just about buying what is necessary. It has become more of a fashion statement and changes with a change in trends. The rise of technology elevated consumer expectations to greater levels. It has helped in providing convenience and personalisation to consumers.

Digital divide

In a country like India, there is an unequal excess of technology. This creates disparities in the participation of traders in the digital economy. Small retailers and marginalised communities such as banjaras often lack these technologies and often find themselves in the backfoot of the digital trade process. The government has tried to reduce this digital divide, but there is still much more to do.

Sustainability challenges in internal trade

Rapid climate change and increasing global warming have become pressing concerns in today’s world. Governments all around the world and consumers are pushing for environmentally sustainable products which will have less impact and cause less damage to the environment. In response to these changes in demand dynamics, trade businesses are facing environmental, social, and ethical challenges.

Environmental sustainability

Reducing carbon emissions

The transportation of goods, be it via land, air or water, contributes to carbon emissions. Fuel is burned in carrying goods from one place to another, in factories during production, which contributes to global warming. There is an increasing need to reduce the carbon footprint of internal trade.

Improving waste management 

A lot of waste products, such as plastic wrappers, straws, etc., are left during internal trade. It is vital to dispose of them in an eco-friendly manner so that they may not end up in water bodies such as oceans, rivers, etc. polluting them.

Product life extension

The product’s life should be extended by the repair or recycling of old products. This in turn will reduce the demand for new production and, therefore, reduce resource consumption.

Social responsibility

Fair labour practices

Often, labour involved in the trade process are exploited. They are paid meagre salary due to unsafe working environments, lack of protective gear, and long hours of work. The government has recently codified 29 labour laws into four to address the problem. It is a serious issue involving human rights also.

Community impact

Small and local businesses should be supported to make a positive impact in the community. It helps in developing an entrepreneurial environment and creates a safe and viable environment for business.

Ethical challenges

Ensuring supply chain transparency

Traders should ensure transparency in their supply chain. This will help consumers avoid products which are a result of child labour, bonded labour, or human rights exploitation. It will force businesses to adopt fair labour practices.

Sustainable sourcing

There is an increasing demand for green and eco-friendly products. Products which have less carbon footprint and are sustainable are on trend. Businesses should adopt and capitalise on such eco-friendly trends.

Post-pandemic resilience in internal trade

As COVID-19 hit the whole world, it hit the country and its internal trade in an unexpected manner. It challenged the internal trade of the country. It rattled the supply chains of the suppliers and changed the thought process and attitude of the consumers towards the product purchase. Many startups, and small businesses, and economy sharks have called it a test which tested the resilience of the trade and businesses.

Impact of COVID-19 on internal trade

Supply chain disruption

The countries around the globe imposed a strict lockdown in order to control the situation of the pandemic. The sudden lockdown and quarantining of the people of the country completely disrupted the supply chain. This was due to the fact that no supplies of raw materials could be made, which led to a shortage of essential goods and raw materials.

Shift in consumer behaviour

It is evident from the statistics that the boost in the online platforms and e-commerce websites was seen during and after the pandemic. Post COVID-19, people shifted to the online mode of purchase rather than the traditional method of street shopping. This happened due to the pandemic, as the majority of places were under lockdown and people did not want to go outside out of security concerns. This gave a boost to the online purchase of goods and services and turned out to be a turning point for the digital revolution and traditional retail patterns.

Economic uncertainty

The pandemic gave rise to uncertainty in the economic patterns of businesses. The consumer’s overall expenditure patterns got affected, and so was the demand for the goods and services. Many startups failed to withstand this uncertainty, and hence they collapsed.

Small business challenge

Due to the safety concerns of the people, many consumers started to shop online, which affected small and medium-sized business owners, and their businesses started to collapse due to the disruption in cash flow, the delayed payments, the increased investment, and the lower returns.

Lessons learned and adaptations made

“Harsh circumstances lead to new beginnings.” This was proven when the pandemic hit. The never seen circumstances arose in front of the people, and it was important to adapt to those challenges in order to sustain. Many learnings were adapted by the people. Some of the key learnings are listed below:

Digital transformation

Businesses started to take their traditional retail businesses to online e-commerce platforms like Amazon and Flipkart to accelerate their business growth. They made use of contactless payments like mobile wallets,UPIs, and online marketing.

Supply chain resilience

After the major disruption of the supply chains during the pandemic, the major focus of the people turned to making the supply chains strong and resilient to such conditions. Companies started to make sustainable models and diversified their suppliers. They started to invest in technologies for real-time visibility of the suppliers.

Remote work and services

During the pandemic, all the companies had to stop working from their offices. The only option to keep the work going was to accept the work from home and give access to employees to work remotely. Soon, working remotely became a norm. Many companies started giving work opportunities permanently from home. This helped the companies to cut the costs of the office place and gave new startups an opportunity to emerge, reducing the need to put in a lot of economic resources. Companies also opted to provide services more digitally.

Customer-centric approach

Due to the pandemic, many consumers were hit by the economic crisis, which made them less reluctant to make purchases. In order to make the purchases grow, many organisations and small-scale businesses made sure that the products and services are customer centric. They started delivering personalised goods and services, and customer’s choices became a priority for the businesses.

Strategies for enhancing resilience in internal trade

After the unavoidable circumstances hit, it was a major concern to build certain strategies which could withstand any such situation in the coming future. Many economists, business heads, researchers came together to propose certain strategies to improve the internal trade and make sure the internal trade is resilient to such crises. Certain key strategies include:

Robust digital infrastructure

With the increased popularity of digital methods of trading, it was important to build a robust infrastructure to continue working. Investments were made by the companies in digital essentials like internet connectivity, the hardware required, and digital payment systems to ensure the efficient working of the systems.

Supply chain diversification

To optimise the supply chains, companies started diversifying their suppliers and investing in applications which gave them a real-time image of how things are working. Diversifying the supply chains made sure that the supply of services and the material was not going to be disrupted, even if one means of supply somehow does not work. It was made sure that redundant supply chain options could mitigate disruptions during crises.

Data analytics and forecasting

Using the data of consumers from across the globe and implementing techniques like data mining and predictive modelling made the suppliers prepared for any of the tough situations. The predictive modelling algorithms for forecasting makes sure that no products are wasted and the services are in adequate amounts.

Agile business models

Agile business models are the models in which the work is divided into smaller sub-tasks. Once the first task is completed, it is discussed with the consumers and after seeing the market conditions and other factors and receiving feedback from the users, the next task starts. This not only saves time but also makes the product closer to the user’s preference. The overuse of material and wastage of money is also avoided using this model.

Resilience testing

The testing teams are set up to periodically check the systems of various businesses to check their resilience to various situations. This testing helps identify the vulnerabilities and loopholes that can be fixed further.

Government support

The government should introduce certain policies which are flexible and can be made use of during such pandemics to make sure that no harm is caused to the business and trading mechanisms. They should also provide support and assistance in case needed during tough circumstances.

Role of digitalisation and contactless transactions

The digital revolution and the introduction of contactless payment methods have emerged as a life saver in such situations. It is predicted that the digital revolution and payment gateways are resilient when situations like COVID-19 pandemic hit.

E-commerce growth

E-commerce has reached new heights during and post pandemic. E-commerce platforms made sure that the products and services are supplied to the consumers even during the pandemic. This made it popular among consumers. Since then, digital marketplaces have become vital for sales and distribution.

Contactless payments

The introduction of contactless payments has given users an edge in making payments in an efficient manner. Methods like mobile wallets and digital currencies make the transactions traceable and easy-to-do. They gained popularity due to the safety and ease they provide while transactions.

Supply chain visibility

Many digital tools and technology advancements, like the IoT, have given ways to provide real-time visibility into supply chains. This has helped the companies to monitor the supply chains, stay alert and fix any disruptions that occur. The responses to the disruptions have now become quicker.

Remote work and services

Digital platforms and internet connectivity have facilitated remote work facilities. People can even work while they are anywhere. This has made it resilient to the circumstances in which you cannot work from a particular place. With this facility, companies can continue their operations even when they cannot while ensuring safety.

Conclusion

Internal trade is the lifeblood of a nation’s economic development. We have tried to understand the multidimensionality of internal trade in this article. We discussed its definitions, categorisation, and the multi challenges faced by it. We also saw the important role played by the Ministry of Commerce to promote internal trade in India by policies, regulations and collaborations with industry associations. The post pandemic era unravelled the flaws in our system of Internal trade. It also showed us the resilient nature of internal trade and its ability to adapt to challenges. Internal trade is definitely not static, it is dynamic and ever-growing to new technology, market trends and consumer demands. The government, business houses, consumers, all be open to new technology and adapt to it to fully harness the full potential of Internal trade in the country. 

Frequently Asked Questions (FAQs)

What is internal trade? How does it differ from international trade?

Internal trade is the buying and selling of goods and services within the boundaries of a nation. It differs from international trade as international trade involves exchange of goods or services between different countries or a group of countries.

What are the main terms used in trade?

The main terms used in Trade are:

Cash on delivery (COD) 

This is a type of transaction in which payment for goods or services is made at the time of delivery. It is generally used in e-commerce shopping. The transaction will be cancelled if the buyer is unable to pay when the goods or services are delivered.

Free on board or free on rail (FoB or FoR)

It refers to an agreement between a seller and a buyer wherein the seller promises to cover all costs up until delivery to a carrier (which could be a ship, railroad, truck, etc.).

Cost, insurance and freight (CFF) 

It is the price of the products which includes the cost of the goods as well as any insurance and freight charges that must be paid on the goods up to the destination port.

Errors and omissions excepted (E&OE)

It refers to that term which is used in trade documents to say that mistakes and things that have been forgotten should be taken into account.

What are the types of retailers?

The are two types of retailers on the basis of fixed place business-

1. Itinerant retailers, such as peddlers and hawkers, market traders, street traders and cheap jacks.
2. Fixed Shop retailers, such as General stores, speciality shops, second hand goods shops, departmental stores, chain stores.

What are the intermediaries in internal trade?

Intermediaries, also known as middleman, are usually independent and help facilitate the movement of goods and services from producer to end users. They connect buyers and sellers and perform various functions to streamline the trade process. They are not the manufacturer or wholesaler or retailer, but they help them in efficiently managing the trade process. Distributors, agents, and brokers are all examples of intermediaries.

How does the Ministry of Commerce promote internal trade?

The Ministry of Commerce promotes Internal trade by formulating trade policies, regulating the market, collaborating with trade associations and launching different schemes such as Make in India and Digital India with the government. It has also taken Internal Trade in its purview under the Department of Promotion of Industry and Internal Trade (DPIIT).

Who heads the Department of Promotion of Industry and Internal Trade (DPIIT)?

The Department of Promotion of Industry and Internal Trade (DPIIT) is headed by Shri Piyush Goyal as Minister, Smt. Anupriya Singh Patel and Shri Som Prakash as Minister of State, and Shri Rajesh Kumar Singh as Secretary.

What is the impact of technology in internal trade?

Technology, such as e-commerce have disrupted the traditional Internal trade model. It has forced the earlier Brick-and-Mortar type retail to transform themselves and keep up pace with the modern market. Also, Direct-to-Consumers (D2C) sales models have challenged the role of intermediaries, wholesalers and retailers.

What are the key challenges faced by internal traders?

Internal traders face a lot of challenges. Some of them include market discrepancies, complex regulations. changing consumer demands, rapidly evolving technologies and sustainability concerns.

What are the sustainability challenges faced by internal trade?

Sustainability challenges in internal trade include challenges of environmental sustainability such as reducing carbon emissions, improving waste management and product life extension. Other challenges are of social responsibility such as fair labour practices, community impact and ethical challenges such as ensuring supply chain transparency, sustainable sourcing.

What lessons have been learnt from COVID-19 Pandemic?

Both businesses and the government have appreciated the importance of digital transactions, online shopping, supply chain resilience and agile business models.

Why is internal trade considered as the lifeblood of a nation’s economic growth?

Internal trade plays a central role when it comes to a nation’s economic growth. It contributes in creating jobs, generating revenue, driving economic growth, meeting consumer demands etc. It contributes significantly to a nation’s GDP. It reduces the import dependency on other countries.

What role has digitalization played in post- pandemic Internal trade?

Digitalization has shifted our focus towards a cashless economy, contactless payments, supply chain visibility and remote working.

What can be done to enhance internal trade?

The adoption of modern technology is crucial for enhancing Internal trade. Technologies such as data analytic can help producers understand consumer demand and manufacture products accordingly. It can also help retailers to keep stock of products in demand. Technologies such as AI can help understand and predict market trends. It can help develop sustainable and eco-friendly material.  Blockchain can be used to create a safe payment environment.

References

• https://dpiit.gov.in/
• https://ncert.nic.in/textbook/pdf/kebs110.pdf 
• https://nios.ac.in/media/documents/SrSec319NEW/319_Bus_Studies_Eng/319_Bus_Studies_Eng_Lesson22.pdf