91Ó°ÊÓ

With the increased globalization, protectionist policies are necessary. Protectionism essentially means the reduction in the volume of foreign trade and putting a cap and check on it. This is done to ensure the domestic players are protected from the foreign competition.

Protectionism essentially limits the foreign, cheaply manufactured imports. If protectionism is removed, the cheap, generally better quality products would be available in the domestic market, forcing domestic players out of the market.

As a result of this protectionism, cheap imports become expensive in the market and also the quantity of imports which constitute the supply side of the market falls. All of it adds to the rise in the prices of the protected good in the domestic market, thus making the consumers worse off.