The policy of import substitution focuses on complete or partial substitution of foreign imports and encourage the production of domestic and indigenous product which replaces the imported product to decrease the depends on foreign nations and also to attend self-reliance.

The policy didn't works as such for the developing nations because it was unable to create a greater impact in long run , the policy has worked in short run but the impact was not very significant .

Following are the problems with the policy :-

1. Country fails to create a domestic market for substitution of import products.

2. The product manufactured by domestic manufacturers are not upto the mark and also have comparatively higher prices and low quality.

3. Improper application of the policy and main focus on import control and ignorance on development of substitutions for products.

Ans.2

Two benifits of export promotion policy :-

1. Export promotion policy encourage the growth of domestic market and helps the businesses to attend economies of scale, products efficiency and technical proficiency.

2 . The export promotion policy help in managing the balance of trade and maintain availability of foreign exchange for imports .