Question

explain how import subsitution can protect domestic industry​

Answer 1

Answer:

explain how import subsitution can protect domestic

Answer 2

Answer:

Explain how import substitution

can protect domestic industry.

Answer:

Import substitution is also known as an inward looking trade strategy.

This policy aimed at replacing or substituting imports with domestic production.

In this policy the government protected the domestic industries from foreign competition. The policy of protection is based on the notion that industries of developing countries are not in a position to compete against the goods produced by more developed economies. It was also feared the possibility of foreign exchange being spent on import of luxury goods if no restrictions were placed on imports.

Protection from imports took two forms:

Tariffs: Tariffs are a tax on imported goods; they make imported goods more expensive and discourage their use.

Quotas: Quotas specify the quantity of

goods which can be imported. The effect

of tariffs and quotas is that they restrict

imports and, therefore, protect the

domestic firms from foreign competition.

This policy allowed the domestic industries grow without fear of competition from imports.

Explanation:

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