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Foreign Direct Investment (FDI) in Indian Automobile Industry: Impact on Employment Generation

Author Affiliations

  • 1 CIRD, Bangalore, Karnataka, INDIA

Res. J. Management Sci., Volume 2, Issue (2), Pages 14-22, February,6 (2013)

Abstract

Indian Automobile Industry is globally one of the largest industries and a key sector of the Economy. Indian Government policies resulting in the Foreign Direct Investment (FDI) infusion in Auto Sector has had a significant impact on job creation. It is therefore most important to see how various policies enunciated at various times have created employment opportunities directly and indirectly in this fast changing Automobile sector. This research paper attempts to understand the inventory of policy responses of the government especially related to FDI in automobile sector. Foreign Direct Investment (FDI) has been considered as a major catalyst in promoting sustainable development in developing countries. FDI has the potential to generate employment, raise productivity, transfer skills and technology, increase incomes, enhance exports and contributes to the long-term economic development of the world’s developing countries. Evidence presented in the form of (available) empirical data with its interpretation suggests there has been significant impact of FDI in Auto Sector in Employment Generation – both in quantity and quality. It can be construed that with further infusion of FDI in this sector as envisaged in Automotive Mission Plan (2006-16) and 12th five year plan (2012-17) of the Government of India; the potential for employment generation is expected to show the same CARG estimated for the Automobile Industry – Automobile manufacturers (OEMs), Auto Component sector and in related enabling services.

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