ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The strategy to earn foreign exchange by promoting domestic exports and making domestic industry competitive in the international market is called: (a) export promotion.

Detailed explanation-2: -Broadly characterized, an outward oriented strategy is one in which trade and industrial policies do not discriminate between production for the domestic market and exports, nor between purchases of domestic goods and foreign goods.

Detailed explanation-3: -During the first seven Five-Year plans, the trade policy was characterised by the inward-looking trade strategy. This strategy is known as import substitution. This policy aimed at substituting imports with domestic production. In this policy, the government protected the domestic industries from foreign competition.

Detailed explanation-4: -An export-led growth strategy is one where a country seeks economic development by opening itself up to international trade. The opposite of an export-led growth strategy is import substitution, where countries strive to become self-sufficient by developing their own industries.

Detailed explanation-5: -Export Promotion strategy promotes only the industries that have potential for developing and competing with foreign rivals. Since the goal is to trade abroad, there becomes competition, which in turn remedies the returns to scale.