Vol. 2, Issue 10, Part I (2016)

Abstract
The Automobile sector of India is one of the largest in the world and accounts for over 7.1% of India’s gross domestic product (GDP). It also contributes to nearly 22% of the country’s manufacturing GDP. The sector was first opened to foreign direct investment (FDI) in the year 1991 during the liberalisation of the Indian economy and has come a long way since. The Foreign Direct Investment in Indian Automobile Industry has opened up new avenues for the development of this important sector of Indian industries. The liberalization of government policies regarding FDI in the automobile industry of India has increased the scope of this industry. The first FDI player in the Indian automobile industry was Suzuki. In 1980s this company entered into a joint venture with Maruti Udyog, a state run enterprise. The then Indian government permitted this company to enter the Indian automobile market in 1983.In 1991, the government of India liberalized its policies regarding the automobile industry of India Foreign Direct Investment in the automotive industry of India was permitted. In 1993, FDI was also allowed in the passenger car segment of Indian automobile industry. This paper analysis the progress so far made through FDI in Indian automobile industry.