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date: 25 September 2017


A Dictionary of Business and Management in India

Peter Enderwick


Government policies that restrict trade with the aim of limiting competition faced by domestic industries. The key protectionist policies are import tariffs, quotas, subsidies and tax advantages for local businesses, and immigration restrictions. Protectionism is sometimes justified through the infant industry argument, that a developing economy may need to ‘protect’ a fledgling or infant industry until it has achieved sufficient scale and experience to compete internationally. Critics argue that protectionism cannot be justified and always results in the misallocation of resources and reduced competitive pressure. India was highly protectionist until the 1990s, and high levels of protection persist in sectors such as agriculture, cosmetics, and military equipment.

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