Governments increasingly use protection and targeted subsidies to promote domestic firms. These policies are usually evaluated in the market they target. This column uses India’s 4G rollout to show why that can be misleading when products and infrastructure are complements. Restricting low-priced Chinese phones slowed 4G network expansion and did not raise Indian phone firms’ profits, while a subsidy open to all 4G phones accelerated coverage more than a domestic-only subsidy.



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