Question

Q7. Consider the following statements with respect to Intermediary Trade:

1. Merchant is a Person who transfers good from one place to another without any value addition.

2. Merchanting transaction is one which involves shipment of goods from one foreign country to another foreign country involving an Indian Intermediary.

Which of the above statements are correct?

• A. a) 1 only
• B. b) 2 only
• C. c) Both 1 and 2
• D. d) Neither 1 nor 2

Answer 1

The correct option is C

c) Both 1 and 2

Intermediary Trade

Merchant is a Person who transfers good from one place to another without any value addition. In Indian Context, the trade is called Merchanting Trade when,

• The supplier of goods will be resident in one foreign country
• The buyer of goods will be resident in another foreign country
• The merchant or the intermediary will be resident in India

In simple terms, Merchanting transaction is one which involves shipment of goods from one foreign country to another foreign country involving an Indian Intermediary. Hence, it is also called Intermediary Trade.