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"The company needs to meet a 30 percent local sourcing rule to be able to open its own stores in the country."

It is just the result of protectionism.



It’s not “just” that, it’s actially the desired result of the protectionist policy, which appears to have been effective.


How dare a country enforce policies that benefit the domestic economy.


Assuming a benefit is a fallacy. It’s a benefit only which analyzed through a superficial lens.


That’s a very abstract comment. Such policies seem completely measurable to me. Can you elaborate?


Why don't other large, developing countries adopt similar policies? What are the downsides?


Many do. The downside is that a heavy import tax makes whatever is being imported more expensive for local consumers to buy. In some sense this makes them poorer.

The goal is usually to encourage local firms to grow and compete, and sometimes that happens (e.g. Hyundai). But sometimes the local firms become complacent in their walled garden (e.g. Hindustan Motors).


You get ignored by lots of international companies that dont want to play by your silly and often unprofitable rules. Leading to a loss of choice and quality in goods and services, and a general depression of the economy over time. The softer hand moves more grain or something.


Revenge in the form of trade wars that screw everyone in the end. Exactly what the US is doing right now with all its tariffs, which are not helping US manufacturers (their stated intent) and are hurting US consumers (due to revenge tariffs).


Many others do, but usually on a more limited basis to protect certain industries. Brazil does for virtually all electronics.


Strong government management of the economy was the foundation for the success of Japan, South Korea, and Singapore in the mid 20th century (as an example). So absolutely people do it.




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