Directions: Select the most appropriate option to complete the statement below.

The post-independence economic framework aimed at achieving self-reliance by replacing foreign imports with domestic manufacturing is known as ______.

The correct option is Import substitution.

Explanation:

Import substitution (also known as Import Substituting Industrialization or ISI) is an economic policy designed to achieve self-reliance by replacing foreign imports with domestic production and manufacturing.

Following independence, India adopted an economic strategy centered on import substitution during the early Five-Year Plans. The core objective was to build a strong domestic industrial base, protect local infant industries from international competition, and minimize dependence on foreign goods.

Key mechanisms of the import substitution strategy included:
1. Tariffs and Quotas: Imposing heavy duties and strict import restrictions to deter foreign goods.
2. Domestic Production Support: Encouraging state enterprises and local manufacturers to produce essential capital and consumer goods.
3. Self-Reliance Goal: Promoting economic sovereignty and conserving scarce foreign exchange reserves.

Why the other options are incorrect:

• Export promotion: An economic policy focused on producing goods specifically for foreign markets to earn foreign exchange.
• Globalisation: The integration of national economies with the global market through trade, financial flows, and international investments.
• Liberalisation: The policy of reducing government controls, licenses, and regulations over business and economic activities.