Concept of Domestic Territory

Last updated at Dec. 14, 2024 by

It refers to the geographical territory administered by a government within which persons, goods and capital circulate freely.

 

It includes:

  1. Political frontiers of the country.
  2. Ships and Aircrafts owned and operated by the normal residents between 2 or more countries. Eg- Plane operated by Air India between US and Italy will be a part of the domestic territory of India.
  3. Fishing vessels, oil and natural gas rigs and floating platforms operated by the residents of a country in the international water, where they have exclusive rights. Eg- Fishing boats operated by Indian fishermen in International waters over Indian Ocean will be a part of domestic territory of India.
  4. Embassies, consulate and military establishments of a country located abroad.

 

It does not include:

  1. Embassies, consulate and military establishments of a foreign country.Eg- Chinese Embassy in India will not be a part of domestic territory of India.
  2. International Organizations like UN, WHO etc located in the geographical borders.

 

Why is Concept of Domestics Territory Important?

It is important to calculate GDP

We have already studied that

GDP includes Total Production within Domestic Territory

So it does not include income earned by Indian citizen working abroad

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Transcript

It refers to the geographical territory administered by a government within which persons, goods and capital circulate freely. It includes: 1 Political frontiers of the country. 2 Ships and Aircrafts owned and operated by the normal residents between 2 or more countries. Eg- Plane operated by Air India between US and Italy will be a part of the domestic territory of India. 3 Fishing vessels, oil and natural gas rigs and floating platforms operated by the residents of a country in the international water, where they have exclusive rights. Eg- Fishing boats operated by Indian fishermen in International waters over Indian Ocean will be a part of domestic territory of India. 4 Embassies, consulate and military establishments of a country located abroad. It does not include: 1 Embassies, consulate and military establishments of a foreign country. Eg- Chinese Embassy in India will not be a part of domestic territory of India. 2 International Organizations like UN, WHO etc located in the geographical borders. Why is Concept of Domestics Territory Important? It is important to calculate GDP We have already studied that GDP includes Total Production within Domestic Territory So it does not include income earned by Indian citizen working abroad

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Maninder Singh

CA Maninder Singh is a Chartered Accountant for the past 14 years and a teacher from the past 18 years. He teaches Science, Economics, Accounting and English at Teachoo