Has the auto component industry been able to attract FDI (foreign direct investment) to the optimal extent?
Recent years have witnessed more and more global players making their entry into the Indian market through joint ventures, collaborations and wholly owned subsidiaries. With the new found interest of leading global giants, the Indian auto market has turned fiercely competitive with India’s dual advantage of a ready market and low cost manufacturing base. The Government has also relaxed rules to promote expansion of the auto industry in view of the escalating demand from the newly affluent middle class. Foreign automakers can now set up fully owned subsidiaries giving India a potential edge over China with its local partner mandate. There is also a boom in auto ancillary companies. India is an attractive outsourcing destination for global auto companies because of its strong engineering skills and low costs. Sourcing parts from India is 10-20 per cent cheaper for US automakers and about 50 per cent cheaper for their European counterparts. Among the car companies that are investing in In
