should india rely on import substitution rather than export promotion to improve its balance of trade

Dear Student,

Import substitution is a trade policy aimed to promote economic growth by restricting imports that competed with domestic products in developing countries.  The import substitution approach substitutes externally produced goods and services with locally produced ones.
Export promotion policies reflect the interest of national governments to stimulate exports. Subsidies, tax exceptions, and special credit lines are the main instruments used to promote exports. Export promotion is sometimes seen as a complementary development strategy to import protection.
Therefore India cannot rely only on import substitution because both import substitution and export promotion have their own advantages and disadvantages, therefore, there should be a balance between them.


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