Q. 195.0( 2 Votes )

What would happen

Answer :

If Govt. of India puts a heavy tax on import of Chinese toys then:

1. Increase in the price of import: A heavy tax will increase the amount that the person who is importing has to pay. He shall pay much higher to import the toys.

2. Increase in market price: When import becomes expensive, the market price will also increase automatically. People will then prefer cheaper Indian toys.

3. Reduction in imports: When demand of Chinese toys goes down because of high price, imports will also automatically decrease. This would benefit Indian toy manufacturers.


Heavy tax is put deliberately by governments to reduce imports. If Indian government puts heavy tax, imports will decrease and this would give a chance to Indian manufacturers to increase production and sales.

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