Import Substitution, Domestic Resource Cost, and Key Sectors in the Indian Economy

Import Substitution, Domestic Resource Cost, and Key Sectors in the Indian Economy R G Nambiar With the industrialisation policy of the 1950s and 1960s, India turned explicitly to a growth strategy, based upon the promotion of import substitution (IS) in consumer goods, basic intermediates, and capital goods industries. As a consequence, domestic manufactured goods as a proportion of the total supply of manufactured goods increased from 0.781 in 1955-56 to 0.857 in 1973-74. Similarly, the share of imports in consumer goods declined steadily from 12.9 per cent in 1955-56 to 3.6 per cent in 1973-74, with imports generally shifting towards investment and intermediate goods.