Fast-growing Automobile Industry in India

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EXECUTIVE SUMMARY

Indian automobile industry is a globally one of the largest industries and a key sector of the economy. The automobile industry is one of the prime industry in india and now one of the fastest growing industries in the world in terms of vehicle manufacturing. The automobile sector in Indian industry is one of the high performing sectors of the Indian economy this has added largely in crating india an important intension for many international players in the automobile industry who desire to deposit up their business in india. The automobile industry in india is increasing by 18 per cent per year. The automobile sector in india was opened upto foreign investment in the year 1991. 100& FDI is allowed in the automobile industry. FDI inflow to automobile industry have been at an increasing rate as india has witnessed a major economic liberalization over the years in terms of various industries. The automobile sector in India is growing by 18 percent per year. The basic advantages provided by India in the automobile sector include, advanced technology, cost-effectiveness, and efficient manpower. Besides, India has a well-developed and competent Auto Ancillary Industry along with automobile testing and R&D centers. The automobile sector in india ranked third in manufacturing three wheelers and second in manufacturing two wheelers. The major investing countries are Mauritius, USA, Japan, UK, Germany, Netherlands and South Korea. The main objective of this research is to study the FDI in Indian Automobile sector. Researcher has used both primary and secondary data to accomplish all the research objectives.

INTRODUCTION

Purpose of the Study

a. To study the concept of Foreign Direct Investment

b. To examine the F...

... middle of paper ...

...ndustry.

Productivity

The performance of the Indian auto industry with respect to the productivity growth partial and total production productivity of the Indian automobile industry have been calculated from the period from 1990-91 to 2010-11, using the Divisia-Tornquist index for the estimation of the total factor productivity growth. The suthor finds the domestic auto industry as registered a negative and insignificant productivity growth during the last one and a half decade. Among the partial factor productivity indices only labour productivity has seen a significant improvement, while the productivity of other three inputs (capital, energy and material) haven’t shown any significant improvement. Labour productivity has increased mainly due to the increase in the capital intensity, which has grown at a rate of 0.14 per cent per annum from 1990-91 to 2010-11.

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