Import substitution means substituting imports with domestic production. Imports were protected by the imposition of tariff and quotas which protect the domestic firms from foreign competition. Impact of Inward looking Trade strategy on the domestic industry.

What is import substitution in geography?

a strategy aimed at reducing IMPORTS in order to encourage the production of domestic substitutes. Import substitution is pursued in particular by DEVELOPING COUNTRIES as a means of promoting domestic INDUSTRIALIZATION and conserving scarce FOREIGN CURRENCY resources.

How does import substitution work?

The import substitution approach substitutes externally produced goods and services, especially basic necessities such as energy, food, and water, with locally produced ones. By doing so, local communities can put their (hard-earned) money to work within their boundaries.

Who uses import substitution?

Import substitution industrialization (ISI) was pursued mainly from the 1930s through the 1960s in Latin America—particularly in Brazil, Argentina, and Mexico—and in some parts of Asia and Africa.

What is import substitution with example?

Import substitution industrialization is an economic theory adhered to by developing countries that wish to decrease their dependence on developed countries. ISI targets the protection and incubation of newly formed domestic industries to fully develop sectors so the goods produced are competitive with imported goods.

What is the other name of import substitution policy?

Import substitution industrialization (ISI) is a trade and economic policy that advocates replacing foreign imports with domestic production.

What does import substitution mean in trade policy?

Import substitution is a strategy under trade policy that abolishes the import of foreign products and encourages production in the domestic market. The purpose of this policy is to change the economic structure of the country by replacing foreign goods with domestic goods.

What does it mean to replace imports with domestic goods?

A strategy that emphasizes the replacement of imports with domestically produced goods, rather than the production of goods for export, to encourage the development of domestic industry.

How does import substitution industrialization ( ISI ) theory work?

The theory targets the protection and incubation of newly formed domestic industries to fully develop sectors so that the goods produced are competitive with imported goods. Under ISI theory, this process makes local economies, and their nations, self-sufficient.

What was the impact of import substitution in India?

Indian economy did not undergo any massive growth or witness sustainable development due to import substitution in India. Lack of competition in the domestic market reflected poorly on both the production capacity and efficiency of public and private firms.