Import substitution is a policy in which imports are generally replaced by domestic production. It aims to encourage domestic industry mainly on the grounds of:
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → self-sufficiency and domestic employment
Import substitution replaces imports with home production to encourage domestic industry. Its grounds are self-sufficiency and domestic employment.
NCERT (2026-27): Glossary: “Import Substitution – A policy of the state for development of economy in which import of goods is generally substituted by domestic production (through import controls, tariffs and other restrictions) with a view to encourage domestic industry on grounds of self-sufficiency and domestic employment.” |