Question

Defend or refute the following statements with valid arguments:
"The policy of protectionism encouraged the growth of domestic industries, but at the same time proved to be an impediment."

Hint:

The policy of protectionism supports domestic industries by shielding them from foreign competition, fostering growth. However, it can also lead to inefficiencies, reduced innovation, and higher consumer prices due to lack of competition. Balancing protectionism with strategic trade policies is essential for sustainable economic development.

Answer 1

Defend: The policy of protectionism safeguarded domestic industries by imposing tariffs and restricting imports, thereby promoting industrial growth in India. However, this policy had certain drawbacks: 
Inefficiency in Industries: Due to limited competition, many domestic industries became inefficient and uncompetitive in the global market.
Consumer Disadvantages: Consumers had limited access to highquality and diverse goods at competitive prices.