The purpose of this study is to identify the most significant contradictions that prevent the effective implementation of the policy of import substitution in Russia in conditions of tough sanctions. The relevance of the study is confirmed by the complex situation in the modern Russian economy. The sanctions policy of the USA-EU in relation to Russia, in particular, supply restraint of high-tech products as well as the continuing dependence of the Russian economy from the exploitation of mineral and other natural resources, force Russia to revise the national policy priorities and to look for new ways of economic development. The main focus here is the national production development, namely, the accelerated development of the manufacturing sector of national economy aimed at the production of national goods to replace imported analogues, that is the essence of the policy of import substitution. The main methods of the research are the comparison, induction, generalization, analysis, synthesis and dialectics. The analysis of modern statistical information describing the current situation in the Russian economy has allowed to identify the most significant contradictions that prevent getting the maximum benefit from the implementation of the import substitution policy. This is, first of all, the disparity in the industry structure of the Russian economy with a predominance of the mining sector and ever-decreasing share of the manufacturing sector. Second, there is the high degree of the wear of fixed assets, outdated equipment, inappropriate to the requirements of the new technological order. Third, there is the decline in the investment activity of private companies and difficulties in raising the additional investments for the financing of measures on the development of domestic production. Fourth, there are the contradictions in the labour market, in particular, restriction of opportunities for the professional growth of young specialists in outmoded equipment, and the presence of workers whose skills and qualifications do not meet the current challenges of the economy. Finally, there are the difficulties in subsidizing of manufacturers producing import-substituting products with a significant state budget deficit. This article emphasizes the role of the state in the implementation of the import substitution policy and suggests possible mechanisms for mitigating the identified contradictions.