Indigenisation (import substitution under pressure)

Indigenisation under pressure is the effort to replace vulnerable imported goods, services or technologies with domestic or politically reliable supply. It can be a pre-emptive resilience policy or a response to sanctions, export controls and commercial withdrawal. A programme's existence does not establish technological independence or economic success.

Mechanism and measures

Import substitution can operate through subsidies, procurement preferences, local-content rules, state investment, protected demand and the acquisition or replication of foreign technology. The intended output is domestic capacity, but capacity has several dimensions: volume, quality, cost, imported content, maintenance, scalability and time to delivery.

An assessment should therefore separate policy target, budget, plant completion, gross output and effective autonomy. A domestically assembled product may still depend on foreign machine tools, software, components or intellectual property. Higher domestic share can coexist with lower performance or greater fiscal cost.

Russia

The Russian Government's July 2025 industrial-policy account reported progress in software, machine tools, aircraft and other priority sectors. It described official targets and performance claims, including adoption rates for Russian software. These figures are authoritative statements of government policy and self-assessment. They are not independent verification of quality, imported content or commercial competitiveness.

Current policy also contains evidence of continuing dependence. A Russian Government notice dated 9 January 2026 extended simplified import procedures for specified electronic devices through the end of 2026, citing the need to prevent shortages under sanctions pressure. Continued import facilitation does not negate substitution. It does disprove a blanket claim of achieved self-sufficiency.

China

China's Fourteenth Five-Year Plan and its plan for a modern circulation system set objectives for innovation, supply-chain security and the relationship between domestic and international circulation. They establish policy direction. They do not show that each targeted technology or sector achieved independence by the end of the plan period.

China also demonstrates that indigenisation need not mean autarky. Domestic capacity can be strengthened while foreign trade, technology and investment remain inputs. The strategic question is whether external dependence has become less coercible, not whether all imports disappeared.

Sequencing and trade-offs

Substitution programmes face a sequencing problem. Bottleneck inputs, testing capability and maintenance skills may need to be secured before headline assembly capacity is useful. Governments can also protect an infant industry for too long, weakening cost and quality discipline. A credible programme should publish milestones for technical qualification, domestic value added and the withdrawal or review of support.

External pressure changes those trade-offs. Urgency may justify redundancy and higher near-term cost, but it does not erase the opportunity cost of capital or the risk of locking in an inferior standard.

Assessment

Success should be measured sector by sector. Useful indicators include domestic value added, critical imported inputs, production yield, unit cost, reliability, export competitiveness and replacement time under disruption. Government output claims need transparent series and independent comparison.

Pressure can accelerate learning and investment, but it can also raise cost, reduce variety and lock in lower-performing technology. Both effects may occur. The relevant conclusion is bounded resilience in a specified sector and period, not national self-sufficiency as a single status.

See also

Strategic materials substitution, synthesis and recycling | Dual circulation strategy | Technology denial | Competitive endurance (attrition by ledger)

Sources

• Government of the Russian Federation, official account of industrial policy and import substitution, July 2025.
• Government of the Russian Federation, extension of simplified import procedures for electronic devices, 9 January 2026.
• State Council of the People's Republic of China, outline of the Fourteenth Five-Year Plan, accessed 29 July 2026.
• State Council of the People's Republic of China, plan for a modern circulation system, 10 January 2022.