IMPORT SUBSTITUTION AND EXPORT

PROMOTION AS DEVELOPMENT
STRATEGIES

Facilitator: Presented By:

Prof. Senapati PGP GROUP 4
 Import Substitution

 Import substitution industrialization (ISI) is a

trade and economic policy that advocates
replacing foreign imports with domestic
production.
 ISI is based on the premise that a country should
attempt to reduce its foreign dependency through
the local production of industrialized products.
 The term primarily refers to 20th-century
development economics policies, although it has
been advocated since the 18th century by
economists such as Friedrich List and Alexander
Hamilton.
 ADVANTAGES AND DISADVANTAGES OF IMPORT
SUBSTITUTION

 ADVANTAGES
• Increase in domestic employment.
• Reduced dependence on labor non intensive industries.
• Resilience in the face of global economic shock
(recessions &depreciations)
• Less long distance transportation of goods.

 DISADVANTAGES
• The IS industries are inefficient as they are not exposed
to internationally competitive industries.
• Increase in unemployment internationally as world
GDP decreases through promotion of inefficiency.
 CURRENT SCENARIO OF IMPORT
SUBSTITUTION IN INDIA
•The current government is keen on import substitution
through Make In India.
•Cut down on imports of inessential commodities.
•Commerce ministry has identifies nine commodities
among inessential commodities which includes:
 Edible oil – included 60% of imports
 Pulses
 Fresh fruits
 Cashews
 Sugar
 Alcoholic beverages
 Processed and packaged items
 Cocoa products and
 Sesame seeds
EXAMPLE - OIL AND GAS INDUSTRY
IINDIA
 Export
Promotion
MEANING OF ‘EXPORT’
 The commodities (goods & services) sold to a foreign
country is called export

MEANING OF ‘PROMOTION’
 Encouragement of the progress, growth or acceptance of
something.

MEANING OF “EXPORT PROMOTION”

 Refers to the policy of the government that offers
encouragement to the exporters with a view to enhance the
exports of the country.
Export Promotion Council Of India
• The Export Promotion Council Of India was established under
Companies Act 1956
• Focuses on promotion of exporters and producers to export goods
• To achieve higher level of export performance & foreign
exchange earnings
• Helps in expansion & diversifying exports

Main items exported from India:

Pharmaceutical Petroleum products Iron ore

Textiles: cotton & Tobacco

Tea & cashew
silk

Gems and Jewellery Miscellaneous

 Advantages of Export Promotion
 Earning of foreign exchange
 Greater utilization of resources
 Full utilization of plant capacity
 Addition of value to primary exports
 Creation of employment
 Encouragement of efficiency in production

Export promotion policies

i) Merchandise Exports from India Scheme (MEIS) (ii) Service Exports
from India Scheme (SEIS)
2. Duty exemption & remission schemes
3. EPCG SCHEME
4. EOU/EHTP/STP & BTP SCHEMES
5. OTHER SCHEMES.
Examples:
The Indian Silk Export Promotion Council
The Indian Silk Export Promotion Council (ISEPC) was set up in 1983 as a company not for
profit under Companies Act duly sponsored by the Government of India in the Ministry of
Textiles.
The Council as on date has a membership of 981 regular exporters of Silk goods whereas more
than 1800 exporters have registered with the Council.

ISEPC works closely with the Government of India on policy formulation concerning silk sector
and provides specialized services to the entrepreneurs enlarging global business opportunities
for the silk industry in India.
The Cashew Export Promotion Council of
India(CEPC)
The Cashew Export Promotion Council of India(CEPC) was established by the Government of India in
the year 1955, with the active cooperation of the cashew industry with the object of promoting exports of
cashew kernels and cashewnut shell liquid from India. By its very set up, the Council provides the
necessary institutional frame-work for performing the different functions that serve to intensify and
promote exports of cashew kernels and cashewnut shell liquid.

The Council provides the necessary liaison for bringing together foreign importers with member exporters
of cashew kernels. The enquiries received from the foreign importers are circulated amongst Council
members.
 References:
https://www.eepcindia.org/page.aspx?id=P160411110629&page=Export-
Promotion-Schemes

http://cashewindia.org/about-us

http://www.indiantradeportal.in/vs.jsp?lang=1&id=0,31,223,225

http://www.theindiansilkexportpromotioncouncil.com/about.php

https://www.iaspoint.com/general-studies/is-make-in-india-an-import-substitution-
strategy/