What's the difference between xsd:include and xsd:import?

The fundamental difference between include and import is that you must use import to refer to declarations or definitions that are in a different target namespace and you must use include to refer to declarations or definitions that are (or will be) in the same target namespace.

I'm interested in this as well. The only explanation I've found is that xsd:include is used for intra-namespace inclusions, while xsd:import is for inter-namespace inclusion.

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