Question

What is the mean by import subsitution ?Explain &how can it protect the domestic industry?

Answer 1

Answer:

i would explain it with example , most recent case was of steel in india.

china was suppling steel at cheaper costs that Indian produced steel due to this Indian steel industry was affected , most product manufacturing companies started importing steel from china. In order to save indian steel manufacturers' import duties on steel were increased. Substituting foreign imported goods for domestic products can be called as "Import substitution"

Explanation:

i have written ans and explanation together.

Answer 2

Answer:

             The import substituting industrialisation was the objective of second FYP (1956-61) till the Seventh FYP (till 1990). The Mahalanobis strategy of development was based on import substitution. The rationale of the import substitution strategy is based on infant industry argument. It helped to save foreign exchange by drastically reducing import of goods. The foreign exchange saved was to be used for the developmental imports such as capital goods, sophisticated technology, etc. It created a protected market and large demand for domestically produced goods.