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Q.Justify the policy of protectionism adopted by India after independence, by giving any one argument.

CBSECBSE Class XII Board 2020Subjective· 1mImportance★★★★★
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India adopted protectionism after independence to shield its nascent domestic industries from foreign competition, allowing them to grow and become self-reliant.

After gaining independence in 1947, India faced a critical economic challenge. The country was predominantly agrarian, with a weak industrial base, and its economy had been structured under colonial rule to serve British interests. The new leadership, particularly under Jawaharlal Nehru, envisioned a self-reliant, industrialised nation. This vision required a deliberate strategy to build domestic industries from scratch, which could not compete with the established, technologically advanced industries of Western countries. Protectionism—through high tariffs, import quotas, and licensing—became the cornerstone of this strategy.

One powerful argument for protectionism was the infant industry argument. The logic is straightforward: new industries in a developing country are like infants—they need time, care, and a safe environment to grow strong. If exposed too early to the harsh winds of international competition, they would be crushed by older, more efficient foreign firms. By imposing high tariffs on imported goods, the government made foreign products more expensive, giving Indian consumers a reason to buy domestically produced goods instead. This guaranteed a market for Indian manufacturers, even if their initial products were costlier or of lower quality. Over time, protected from external pressure, these industries could achieve economies of scale, improve efficiency, and eventually become competitive on their own.

Note

This policy was not unique to India. Many developed countries, including the United States and Germany, used protectionist measures during their own industrialisation in the 19th century. It was only after their industries matured that they advocated for free trade.

The protectionist policy was implemented through a comprehensive system of industrial licensing, import substitution, and state-led planning. For example, the government restricted the import of machinery, chemicals, and consumer goods that could be produced domestically. This forced foreign companies to either set up manufacturing units in India (which required technology transfer) or lose the Indian market entirely. The result was the creation of a diversified industrial base—from steel and heavy machinery to textiles and pharmaceuticals—that laid the foundation for India's later economic growth. …

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