Explain how import substitution can protect domestic industry.

Solution

Import substitution implies replacing domestic goods and services instead of importing them. For a developing counting like India, in order to accelerate the pace of economic development two important parameters are:

(a) Export promotion and

(b) Import Substitution.

Import substitution is always welcomed by domestic industry and small indigenous manufacturers. However, in the quest to substitute the imports, sometimes, local production becomes expensive.

Some More Questions From Indian Economy 1950-1990 Chapter

In India who is the chair person of Planning Commission?

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Indian Economy 1950-1990

Explain how import substitution can protect domestic industry.

Some More Questions From Indian Economy 1950-1990 Chapter

In India who is the chair person of Planning Commission?

Who formulate plans in India?

Who floated the idea of planning in India first of all?

How many plans have been completed in India so far?

Define capitalist economy.

What is a socialist economy?

What is mixed economy?

What is meant by economic growth?

What structural change undergoes with development of the economy?

Name the sectors from which the GDP of a country is derived.

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