IMPORT SUBSTITUTION INDUSTRIALIZATION (ISI) AND ECONOMIC GROWTH

ABSTRACT

Sahu discusses import substitution industrialization (ISI) and economic growth. The Government is planning to introduce an Import Substitution Policy to replace imports and boost domestic manufacturing in the wake of the current economic scenario due to Covid-19. Of late there have been talks about import substitution because it is equally effective as export promotion in earning and saving foreign exchange and creating Jobs. Covid-19 will certainly lead to increasing localization everywhere. ISI is a trade and economic policy which advocates replacing foreign imports with domestic production. Import substitution industrialization is a development strategy focusing on promoting domestic production of previously imported goods to foster industrialization. A developing country should, whenever possible, produce goods domestically, rather than importing them.