Domestic (Economic) Territory

Domestic (Economic) Territory

According to United Nations, 'Economic territory is the geographical territory administered by a government within which persons, goods and capital circulate freely.' Remember, income generated within domestic territory of a country during a year is called domestic income. Domestic territory is also called economic territory. The following items are included in domestic territory :

What domestic (economic) territory includes.

(i)    Territory lying within the political frontiers of a country. It includes territorial waters also.

(ii)    Ships and aircrafts owned and operated by the resident between two or more countries. For instance, Indian ships moving between U.K. and Pakistan regularly or passenger planes operated by Air India between Russia and Japan are parts of domestic territory of India.

(iii)    Fishing vessels, oil and natural gas rigs and floating platforms operated by the residents of a country in the international waters or engaged in extraction in areas where the country has exclusive rights of operation. For example, fishing boats operated by Indian fishermen in the international waters of the Indian Ocean will be considered as a part of domestic territory of India.

(iv)    Embassies, consulates and military establishments of the country located abroad. To illustrate, Indian embassies in Russia, America and other countries will form parts of domestic territory of India. Similarly embassies of other countries like Russia, America, Japan, etc. located in India are parts of domestic territories of their own countries and not of India.

What domestic (economic) territory does not include.

(i)    Territorial enclaves (like embassies) used/administered by foreign governments.

(ii)    International organisations which are physically located within economic territory of a country. Their offices form a part of international territory.