Posted in Finance, Accounting and Economics Terms, Total Reads: 296
Definition: Trading Partner
Trading partner is each one of the two companies / countries which are involved in a business relationship with one another, carrying out trade between them. The business of buying and selling of products, commodities or services is known as trade. Now the process of buying and selling essentially mandates the requirement of both a seller and a buyer.
These trading partners are bound by an agreement called the trading partner agreement. It is an agreement drawn between the two trading partners, who have agreed upon some items and information that they would trade with each other. This agreement basically outlines the terms and conditions of the trading process. They define laid down terms such as the compensation for which a party is eligible in case of an inequitable trade. The trade partner agreements are more commonly tailored specifically for electronic transactions.
The list of duties and responsibilities expected out of each party in the trade are laid out in the trading partner agreements. It specifies all the terms of delivery and receipts of goods and services. No single format or specific content is defined for these agreements.
For example, according to the ministry of commerce, the fifteen largest trading partners represent 60% of the total trade by India. These include China, US, UAE, Saudi Arabia, Germany, Switzerland, Hong Kong, Indonesia, South Korea, Malaysia, Singapore, Nigeria, Belgium, Qatar and Japan. All these trade partners of India, sell and buy one or the other product or service from India in compliance with the trading partner agreements.