What is import substitution, Business Economics

What is import substitution?

Import substitution:

It is a government industrialisation policy for development by replacing imports along with domestic production.

  • Stage 1: Identify labour intensive domestic industries now met by imports for example textiles, shoes and clothes.
  • Stage 2: Import the capital and intermediate goods required to make labour intensive and low capital goods.
  • Stage 3: Prevent such infant industries along with quotas and tariffs. Domestic output starts to replace imports.
  • Stage 4: Start exporting or make own capital goods.

 

Posted Date: 8/30/2013 7:38:32 AM | Location : United States







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