Explain how import substitution can protect domestic industry?
The policy of Import substitution was an integral part of the industrial policy of India. This policy implies discouraging the imports of those goods that could be produced domestically. By discouraging the imports it provided a protective environment to the domestic producers. This protection was achieved by imposing various barriers in the form of tariffs and quotas on the imports of goods. The rationale for providing the protection was that the domestic industries were still at an infant stage. Thus, they required protection so that they can grow and develop and become competent enough before they face foreign competition