Import substitution implies

Import substitution implies

importing new items in place of old items of import
gradual reduction of imported goods to save foreign exchange
increasing domestic supply of goods by imposing import restrictions
replacing import items by domestic production of such items
This question was previously asked in
UPSC CAPF – 2011
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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