The following are the distinguishing features of international trade:
(1) Immobility of Factors:
The degree of immobility of factors like labour and capital is generally greater between countries than within a country. Immigration laws, citizenship, qualifications, etc. often restrict the international mobility of labour.
International capital flows are prohibited or severely limited by different governments. Consequently, the economic significance of such mobility of factors tends to equality within but not between countries. For instance, wages may be equal in Mumbai and Pune but not in Bombay and London.
(2) Heterogeneous Markets:
In the international economy, world markets lack homogeneity on account of differences in climate, language, preferences, habit, customs, weights and measures, etc. The behavior of international buyers in each case would, therefore, be different.
(3) Different National Groups:
International trade takes place between differently cohered groups. The socio-economic environment differs greatly among different nations.
(4) Different Political Units:
International trade is a phenomenon which occurs amongst different political units.
(5) Different National Policies and Government Intervention:
Economic and political policies differ from one country to another. Policies pertaining to trade, commerce, export and import, taxation, etc., also differ widely among countries though they are more or less uniform within the country. Tariff policy, import quota system, subsidies and other controls adopted by governments interfere with the course of normal trade between one country and another.
(6) Different Currencies:
Another notable feature of international trade is that it involves the use of different types of currencies. So, each country has its own policy in regard to exchange rates and foreign exchange.