Which is better import substitution or export promotion?

Which is better import substitution or export promotion?

MEANING OF “EXPORT PROMOTION”  Refers to the policy of the govt that offers encouragement to the exporters with a view to enhance the exports of the country.  Import substitution is a trade policy aimed to promote economic growth by restricting imports that competed with domestic products in developing countries.

What is import substitution and export promotion strategies?

The strategy uses tariffs, import-quotas and subsidies to promote and protect import-substitute industries. In contrast, an outward-looking strategy emphasises participation in international trade by encouraging the allocation of resources in export-oriented industries without price distortions.

What is import and export promotion?

Import-promotion policies are measures intended to increase the volume of a country’s imports from a particular trading partner or group of trading partners. By promoting imports from one specific source, VIEs allowed imports from the favored source to displace lower-cost exports from other countries (trade diversion).

What are the advantages of import substitution?

Import substitution is popular in economies with a large domestic market. For large economies, promoting local industries provided several advantages: employment creation, import reduction, and saving in foreign currency that reduced the pressure on foreign reserves.

What are the advantages of export promotion?

Advantages

  • Export promotion leads to expansion of goods for the foreign market.
  • Export promotion industries have a wide market for their produce for both domestic and foreign markets.
  • Exporting products boosts the local economy and helps local businesses increase their revenue.

What is another name of export promotion policy?

Export Import Policy or better known as Exim Policy is a set of guidelines and instructions related to the import and export of goods. The Government of India notifies the Exim Policy for a period of five years (1997 2002) under Section 5 of the Foreign Trade (Development and Regulation Act), 1992.

What are the benefits of export promotion?

Benefits of export promotion to the farmers

  • Boost production rate.
  • Helps farmers to market their products and earn good income.
  • It leads to specialization in different aspects of agriculture.

Why is import substitution bad?

Many economists are now harshly critical of the results of import substitution, arguing that it has fostered high-cost, inefficient production. Beginning about 1985, many developing countries, dissatisfied with the results of import-substitution policies, greatly reduced rates of protection for manufacturing.

How is export promotion different from import substitution?

In contrast, an outward-looking strategy emphasises participation in international trade by encouraging the allocation of resources in export-oriented industries without price distortions. It does not use policy measures to shift production arbitrarily between serving the home market and foreign markets.

How does import substitution affect growth of a country?

There are three sources that put growth of a country into motion: import substitution, export and the increase in internal demand. First two of these are related to international trade effects; but the third is related to expenditures inside the country.

Which is the first country to use export promotion?

However in the next decade, when industries protected through import substitution failed to achieve targeted productive and allocative efficiencies, countries switched to export promotion strategies. Hong Kong, South Korea, Taiwan and Singapore were among the first to adopt the export promotion strategy.

What’s the difference between EP and import substitution?

Comparisons between EP and IS The IS strategy prescribed by structuralists such as Presbish (1950) and Myral (1957) favored expansion of the industrial sector in the domestic market to substitute for imports.

Which is better import substitution or export promotion? MEANING OF “EXPORT PROMOTION”  Refers to the policy of the govt that offers encouragement to the exporters with a view to enhance the exports of the country.  Import substitution is a trade policy aimed to promote economic growth by restricting imports that competed with domestic…