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VOL. 1, ISSUE 3 (2019)
Import Substitution Strategy of Development
Authors
Vivek Kumar
Abstract

Import Substitution refers to substitution of imported goods by those produced within the country. It implies change in the composition of domestic production in a manner such that we ourselves start producing goods which are imported from rest of the world. Imports can be slashed through two sets of measures: (i) fiscal measures in terms of customs duties or import tariffs, and (ii) quantitative controls in terms of imports of quotas for the stipulated imports. Import Substitution has been accepted as an important component of ‘development strategy’ and ‘international trade strategy’ in India right from the inception of Five- Year Plans.

The first stage of Import Substitution entails the placement of the replacement of the imports of non-durable consumers goods such as clothing, shoes, and household goods, and of their inputs such as textile fabrics, lather and would, by domestic production, since these commodities suit the combination existing in developing countries that are at the beginning of industrialization process. The commodities in question are intensive in unskilled labour. Second stage of Import Substitution involves the replacement of imports intermediate goods and producers and consumers durables by domestic production. The production of these goods require highly capital intensive techniques. Economists are not unanimous as to how far Import Substitution policy will be instrumental and helpful in promoting economic development. Indeed, these quantitative studies confirm the usefulness of Import Substitution to economic development. Question arises, would it be expedient for the Government to promote Import Substitution indiscriminately in all spheres of production? It is difficult to answer.
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Pages:43-45
How to cite this article:
Vivek Kumar "Import Substitution Strategy of Development". International Journal of Management and Economics, Vol 1, Issue 3, 2019, Pages 43-45
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Import Substitution Strategy of Development | International Journal of Management and Economics