An Empirical Review of India's Automobile Manufacturing Sector in The Global Value Chain

Abstract

This Review examines the automobile manufacturing sector in India, focusing on its integration into the global value chain and its pivotal role in the national economy. India’s automobile industry has undergone significant transformations since the economic liberalization of 1991, which catalyzed a surge in foreign direct investments and nurtured a competitive market environment. The industry’s expansion is underpinned by a robust internal market, driven by a growing middle class, rising disposable incomes, and a demographic trend favouring vehicle ownership. The study delineates the evolution of this sector into one of the world’s foremost automobile production hubs. It maps the geographical and strategic facets of automotive clusters located in states like Tamil Nadu, Maharashtra, Gujarat, and Haryana, which have thrived due to conducive government policies, sound infrastructure, and the availability of skilled labor. Environmental considerations form a core component of the sector’s strategy, with increasing adoption of Green Supply Chain Management (GSCM) practices aimed at reducing carbon footprints and other environmental impacts. The industry's shift toward manufacturing electric and hybrid vehicles illustrates its alignment with global sustainability trends