Question : Which policy aimed to protect domestic industries from foreign competition in India?
Option 1: Import substitution
Option 2: Export promotion
Option 3: Public-private partnership
Option 4: Swadeshi movement
Correct Answer: Import substitution
Solution : The correct answer is (a) Import substitution
Import substitution was a policy approach adopted by India with the aim of protecting domestic industries from foreign competition. This policy was prevalent during the early years of India's independence and continued for several decades.
Under import substitution, the government implemented measures to reduce dependence on imported goods by promoting the development of domestic industries that could produce those goods. The policy involved imposing high tariffs, import restrictions, and other trade barriers to discourage imports and protect domestic industries from foreign competition.
However, over time, the limitations of import substitution became apparent, including inefficiencies, lack of competitiveness, and a narrow domestic market. These factors eventually led to a shift in India's economic policies, with the initiation of liberalization measures in the early 1990s.
