From Import Substitution to Integration into Global Production Networks: The Case of the Indian Automobile Industry

Prema-chandra Athukorala and C. Veeramani ()
Additional contact information
C. Veeramani: Associate Professor, Indira Gandhi Institute of Development Research.

Asian Development Review, 2019, vol. 36, issue 2, 72-99

Abstract: This paper examines the growth trajectory and the current state of the Indian automobile industry, paying attention to factors that underpinned its transition from import substitution to integration into global production networks. Market-conforming policies implemented by the government of India over the past 2 decades, which marked a clear departure from protectionist policies in the past, have been instrumental in transforming the Indian automobile industry in line with ongoing structural changes in the world automobile industry. India has emerged as a significant producer of compact cars within global automobile production networks. Compact cars exported from India have become competitive in the international market because of the economies of scale of producing for a large domestic market and product adaptation to suit domestic market conditions. Interestingly, there are no significant differences in prices of compact cars sold in domestic and foreign markets. This suggests that the hypothesis of “import protection as export promotion” does not hold for Indian automobile exports.

Keywords: automobile industry; foreign direct investment; global production networks; India (search for similar items in EconPapers)
JEL-codes: F13 F14 L92 L98 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://www.mitpressjournals.org/doi/pdf/10.1162/adev_a_00132 (application/pdf)

Related works:
Working Paper: From import substitution to integration into global production networks: the case of Indian automobile industry (2018)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:tpr:adbadr:v:36:y:2019:i:2:p:72-99

Access Statistics for this article

Asian Development Review is currently edited by Yasuyuki Sawada and Naoyuki Yoshino

More articles in Asian Development Review from MIT Press
Bibliographic data for series maintained by The MIT Press ().