Explain five measures taken by a country to: (a) restrict imports (b) promote exports

Answer Details

(a) Five measures taken to restrict imports

1. Import duties (tariffs): Imposing high customs duties on imported goods raises their prices and discourages their purchase.
2. Import quotas: Fixing a maximum quantity of a commodity that may be imported within a period limits inflow.
3. Import licensing: Requiring traders to obtain a licence before importing restricts the number and volume of imports.
4. Total ban (embargo): Prohibiting the importation of certain goods entirely keeps them out of the country.
5. Foreign exchange control: Limiting the foreign currency made available to importers reduces their ability to buy from abroad.

(b) Five measures taken to promote exports

1. Export subsidies: Government grants and financial assistance lower the cost of production, making exports cheaper and competitive abroad.
2. Devaluation of currency: A lower value of the domestic currency makes exports cheaper to foreign buyers, boosting demand.
3. Removal or reduction of export duties: Abolishing taxes on exports increases the profit of exporters and encourages them.
4. Export promotion agencies and trade fairs: Setting up bodies and organising international trade fairs advertise home products abroad.
5. Improved infrastructure and export credit: Providing good ports, roads and cheap credit facilities to exporters eases and encourages exporting.