Everyone is enthusiastic about the prospects for India since Narendra Modi was elected Prime Minister in May. Mr. Modi’s election is auspicious because he is thought of as a pro-business leader. Also his election brought with it the first single-party majority that India has had in 30 years. Previous coalition governments have not agreed on policy or gotten things done.
Government weakness over many years shaped economic development. Currently India is strong in technology, software, services outsourcing, and financial services but produces only 4% of the world’s cars. (China produces 25% of the world’s cars). The manufacturing sector generates just 16% of India GDP. (In contrast, manufacturing generated 46% of China’s GDP in 2010). “Financial services and IT, these are sectors where you can win if the government is not involved,” Alasdair Spink noted, “Manufacturing and infrastructure can only happen if the government is involved.”
Manish Varghese who leads Odgers Berndtson’s India Automotive practice noticed a new trend: international automotive companies are bringing research and development to India. Also a recent article in the Economic Times of India identified 12 expatriate R & D professionals who have been hired by Indian automotive companies like Mahindra and Mahindra and Tata Motors to lead their R & D efforts and help develop global product lines.
|India's economy needs a boost.|
To read more about India's automotive industry, read Manish Varghese's new article: Indian Automotive Sector - Gearing Up to Accelerate
For a detailed view of the impact that Narendra Modi’s election may have in India, read the article by Alasdair Spink, India Managing Director: Modi-fied - Will India Shine Again?