Exams › SSC CGL (Prelims) › General

Why was the 'Import Substitution' strategy adopted in India's industrial policy during 1950–1980?

1. To encourage foreign direct investment in retail
2. To protect domestic industries from foreign competition
3. To increase the import of luxury goods
4. To shift labor from industry to agriculture

Correct answer: To protect domestic industries from foreign competition

Solution

Import substitution was adopted to reduce reliance on foreign goods and nurture Indian industries in their early stages. By limiting imports and encouraging local production, the government sought to protect domestic firms from stronger foreign competition.

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