ABSTRACT
Chapter 5 is an attempt to explore the influence of the changing policy regime after 2000 on the process of technological development in the passenger car industry. It is observed that passenger car manufacturers, especially the subsidiaries of foreign firms, are repeatedly importing technology to offer technologically advanced cars. It appears as there is a huge gap in spending on R&D performed by parent firms outside India and their subsidiaries operating in India’s car industry, on the one hand, and growing spending of foreign subsidiaries operating in Indian car manufacturers on various kinds of technology imports, including imports of components and CKD/SKD kits, on the other. These developments have far-reaching implications for the long-term development of the industry and the outflow of foreign exchange if imports are happening without a corresponding increase in export earnings.
