Import substitution implies

[amp_mcq option1=”importing new items in place of old items of import” option2=”gradual reduction of imported goods to save foreign exchange” option3=”increasing domestic supply of goods by imposing import restrictions” option4=”replacing import items by domestic production of such items” correct=”option4″]

This question was previously asked in

UPSC CAPF – 2011

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The correct option is D) replacing import items by domestic production of such items.

Import substitution is an economic strategy where a country aims to reduce its dependence on foreign imports by promoting domestic production of goods that were previously imported. The core idea is to replace imported goods with domestically manufactured ones.

Import substitution industrialization (ISI) was a popular development strategy in many developing countries, particularly in the mid-20th century. It often involves using protectionist measures like tariffs and quotas to make imports more expensive or difficult, thereby encouraging domestic industries to develop and produce these goods. While a potential outcome might be saving foreign exchange (Option B) and tools might involve import restrictions (Option C), the definition is the act of replacing imports with domestic production.

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