Benevolent Benefactor or Insensitive Regulator? Tracing the Role of Government Policies in the Development of India's Automobile Industry

Policy Studies, No. 58, East-West Center, Honolulu, March 2011

84 Pages Posted: 27 Mar 2011

See all articles by Rajnish Tiwari

Rajnish Tiwari

Hamburg University of Technology (TUHH)

Cornelius Herstatt

Technical University Hamburg-Harburg (TUHH)

Mahipat Ranawat

affiliation not provided to SSRN

Date Written: March 1, 2011

Abstract

The impressive and sustained growth of India's automobile industry in recent years has catapulted it into the league of the world's top-seven producers of four-wheelers. In the past decade, its exports have surged more than 25 percent a year on average. The turning point was arguably the 1991 policy of economic liberalization, but the impact of the reforms might have been subdued, if the Government of India had not played a pivotal role in the industry's evolution. This apparent "paradox" may be the key to understanding why the industry has adjusted so quickly to globalization, even though economic reforms began relatively late.

This study identifies the main thrusts of policy regimes for the automobile sector since 1947, which began in an over-regulation mode in the early period of independence. Nonetheless, the government consciously attempted to create and sustain favorable "innovation systems" at national, regional, and sectoral levels. Especially since 1991, many policy initiatives have benefited the industry and helped it reach the growth path it is following today.

Keywords: India, Policy, Automotive Industry

Suggested Citation

Tiwari, Rajnish and Herstatt, Cornelius and Ranawat, Mahipat, Benevolent Benefactor or Insensitive Regulator? Tracing the Role of Government Policies in the Development of India's Automobile Industry (March 1, 2011). Policy Studies, No. 58, East-West Center, Honolulu, March 2011. Available at SSRN: https://ssrn.com/abstract=1792330

Rajnish Tiwari (Contact Author)

Hamburg University of Technology (TUHH) ( email )

Hamburg, D-21071
Germany

HOME PAGE: http://www.global-innovation.net

Cornelius Herstatt

Technical University Hamburg-Harburg (TUHH) ( email )

Hamburg, D-21071
Germany

Mahipat Ranawat

affiliation not provided to SSRN ( email )

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