Import substitution

Import substitution means producing goods at home instead of importing them — a key aim of the public sector during the early plan periods.

• During the second and third Five Year Plan periods, India aimed to become self-reliant in many fields.
• Obtaining foreign exchange was difficult, making it hard to import the heavy machinery needed for a strong industrial base.
• To address this, public sector companies in heavy engineering — which would help substitute imports — were established. …