bad impact and good impact of inward looking trade policy
Inward looking trade policy is a policy which advocates the replacement of imported goods by domestically produced goods. This policy is also known as import substitution. A government can do so either by imposing taxes on the import items there by making them expensive as compared to domestically produced goods or by giving special grants or subsidies to the domestic producers.
There are some advantages and disadvantages of doing so.
Advantages
It promotes domestic industry.
It increases GDP and therefore income of the domestic people.
Protects infant industries from foreign competition.
Restricts outflow of foreign reserves of the government.
Disadvantages
It restricts competition, improved quality of goods and services.
Restricts import of new technology and ideas.
Increases inefficiency of the domestic producers.
Limits choices available for the consumers to choose among various goods and services.
There are some advantages and disadvantages of doing so.
Advantages
It promotes domestic industry.
It increases GDP and therefore income of the domestic people.
Protects infant industries from foreign competition.
Restricts outflow of foreign reserves of the government.
Disadvantages
It restricts competition, improved quality of goods and services.
Restricts import of new technology and ideas.
Increases inefficiency of the domestic producers.
Limits choices available for the consumers to choose among various goods and services.