0:07 import substitution is a strategy which
0:10 emphasizes replacing Imports with
0:12 domestically produced Goods to encourage
0:14 the development of domestic industry
0:17 moreover the goods produced under this
0:19 are consumed in the country itself and
0:22 not exported it also targets the
0:24 protection and incubation of newly
0:27 formed domestic Industries so that their
0:29 goods are competitive with their
0:31 imported counterparts developing
0:33 countries take this step to decrease
0:36 their dependence on developed countries
0:38 the center protects its domestic
0:41 industry mainly by imposing two types of
0:44 trade barriers one is by imposing quotas
0:47 and the second is through tariffs under
0:49 the quota route the government specifies
0:51 the number of goods that can be imported
0:54 if the demand is higher than that it
0:56 needs to be met through domestic
0:58 production under tariffs attacks is
1:01 imposed on imported products making them
1:03 costlier this discourages the import of
1:06 these products before the independence
1:10 in 1947 Britain held a monopoly over
1:13 India's exports and imports however in
1:16 1950 the country entered an era of
1:19 planned development in the first seven
1:21 five-year plans trade in India was
1:24 characterized by an inward looking
1:27 strategy or import substitution this
1:31 went on till 1990. in 1991 The nazima
1:32 Rao government undertook the
1:35 liberalization privatization and
1:38 globalization reforms also called LPG
1:40 reforms it allowed foreign companies to
1:43 come to India to make and sell products
1:45 the Indian economy in a way allowed
1:48 Imports as well as exports of goods
1:51 there are two major disadvantages of
1:54 restricting Imports through this policy
1:57 one it limits the range of products for
1:59 customers of the country as they only
2:02 have to largely purchase what's produced
2:05 domestically second the producers are
2:07 aware that they have a captive market
2:10 and thus there is less emphasis on
2:12 improving the quality of goods so
2:15 customers have a higher risk of getting
2:22 foreign
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