DESIRABLE GOVERNMENT SUPPORT FOR FDI IN INDIAN AUTOMOBILE INDUSTRY: AN EMPIRICAL PAPER Download

A precondition for successful targeting of inward investment is an understanding of its likely impacts. To date, most attempts to assess the Desirable government support of FDI have concentrated on short term impacts. The analysis for factors of desirability has focused on including choosing sample structure of FDI in foreign partners, Determinants of FDI, and Desirable government support for FDI in Indian automobile industry. This article draws on the literature to develop a conceptual framework of Desirable government support on FDI in Indian automobile industry. This framework is then contrasted with one derived from a major empirical study of the effect of FDI in automobile industry. Present 100% Foreign Direct investment (FDI) is allowed under the automatic route in the auto sector, subject to all the applicable regulations and laws.FDI plays a very important role in the development of the country. The world's second most populous country could not attain the expected growth level in automobile sector. The growth of FDI gives opportunity to Indian industry for technological up gradation, gaining access to global managerial skills and practices, optimizing utilization of human and natural resources and competing internationally with higher efficiency. The paper examines the needs of FDI in automobile sector by analyzing the FDI inflows from 2000 to 2016. To investigate about the desirable government support over the FDI in Indian automobile industry, two companies as well Maruti Suzuki and Mahindra & Mahindra are taken in the primary data. To compare the primary data these two companies' with descriptive statistics, Anova & Regression are used 95% significance level. The results obtained are having good impact with a significance value of 0 .000(p=.000), which is less than the 0.05 significance value. Hence the results proven that thedesirable government support is present over the FDI in these two automobile companies.