India Can Become World Leader In Automobile Industry: UNCTAD

28 June, New Delhi

India has the potential to become a world leader in the automobile industry with foreign investors showing enough of involvement , an UNCTAD report of world investment has said.

The automotive industry is a key part of the Indian economy and has been identified as one of the key industries in which India has the potential of becoming a world leader, the UNCTAD World Investment Report, 2015 noted.

The industry has seen significant amount of overseas investment. The cumulative foreign direct investment (FDI) between April 2000 and November 2014 amounted to 11.4 billion dollar . The country accounted for the majority of Greenfield investment projects announced by global automakers and the first tier parts suppliers in South Asia during 2013-14, including 12 projects above 100 million dollar , the report said.

It said the inward FDI has led to the emergence of a number of industrial clusters in India, including those in the National Capital Region (Delhi-Gurgaon-Faridabad) in the north, Maharashtra (Mumbai-Nasik-Aurangabad) in the west and Tamil Nadu State (Chennai-Bangalore-Hosur) in the south.

Though considerable differences exist in the patterns of the formation of these clusters, FDI can play an important catalytic role. For example, the early entry of Suzuki has contributed to the development of an industrial cluster in the NCR , the report pointed out.

As for South Asia, it said that the FDI success stories have emerged at country-industry-and local levels with the automotive industry in India showing how large-scale FDI inflows can reshape the trajectory of industrial progress in low-income countries.