Revisiting the Debate on Import-Led Substitution and Export-Led Industrialization: Where Is India Heading Under Self-Reliant India?

The industrial policy is back in vogue of the ‘development discourse’ both in the developed and developing countries due to suboptimal success of market-oriented policies in facilitating socioeconomic and structural transformation. The rise of debate and discourse on industrial policy is also shaped by many other developments such as evolution of newer technologies and their impact on manufacturing, global trade protectionism and pandemic-induced global supply chain disruption( s) among others. The increased interest in the industrial policy at the time of global protectionism has refreshed the old debate in the developing countries on the choice of industrial model, that is, import-substituting industrialization (ISI) and export-led industrialization (ELI). In this context, this article examines India’s industrial strategy under the Self-Reliant India Mission with a special focus on trade policy, investment policy and production-linked incentives (PLI) to understand whether it is adopting policies that squarely fall under the ISI or ELI model. The findings of the article are based on analysis of the trade policy, investment policy and PLI scheme to illustrate that India is adopting policies that broadly fall under the ambit of ISI model thus taking India economy back to re-adoption of inward-looking policies of prereforms era. industrial policy, trade policy, investment, production subsidies, free trade agreement and industrial revolution