Assertion:In the first seven plans, trade was characterised by an import substitution strategy on one hand and export promotion on the other.

Reasoning: The government aimed at protecting the domestic industries from foreign competition in the first seven plans by way of quotas and tariffs.

Assertion (A) is not true but Reasoning (R) is correct.

In the first seven plans, trade was characterised by what is commonly called an inward looking trade strategy.

The policy of protection was based on the notion that industries of developing countries were not in a position to compete against the goods produced by more developed economies. It was assumed that if the domestic industries were protected they would learn to compete in the course of time. Our planners also feared the possibility of foreign exchange being spent on import of luxury goods if no restrictions were placed on imports. Nor was any serious thought given to promote exports until the mid-1980s.