Comparison of Indian and Global Automotive industryThe United States was the frst major player from 1900 to 1960, after which Japan took its place as the cost-ecient leader! "ost eciency #ein$ the only real means in as mat%re an ind%stry as a%tomo#iles to retain or impro&e market share, $lo#al a%to man%fact%rers ha&e #een so%rcin$ from the de&elopin$ co%ntries! 'ndia and "hina ha&e emer$ed as fa&o%rite destinations for the frst-tier ()*s since late 19+0s! There are only a few dominant 'ndian ()*s, while the n%m#er of ()*s is &ery lar$e in "hina ,1-- car man%fact%rers and 1-0 motorcycle man%fact%rers.! The major ad&anta$e of the 'ndian economy is ed%cated and skilled workforce with knowled$e of )n$lish! (%r disad&anta$es incl%de poor infrastr%ct%re, complicated ta/ str%ct%re, in0e/i#le la#o%r laws, inter-state policy di1erences and inconsistencies! The dri&ers of "hinese economic $rowth are 23', la#o%r prod%cti&ity $rowth, which was 1!4 times hi$her than that in 'ndia in the last decade, and domestic demand! 2iscal press%re is mo%ntin$ on the "hinese $o&ernment, while 'ndia is in a #etter state! 5ased on comparisons of cost composition to pinpoint the areas in which the 'ndian a%to ind%stry is at a disad&anta$e, this st%dy recommends a 67T re$ime, speedy proced%res, imports d%ty c%ts on raw materials, common testin$ anddesi$n facility, la#o%r reforms, %p$radation of desi$n and en$ineerin$ capa#ilities and #rand #%ildin$!(n analy8in$ the implications of the 'ndia-7S)794 2ree Trade 7$reements for the 'ndian a%tomoti&e ind%stry! 7S)79 economies are $lo#ally more inte$rated than 'ndia! The c%rrent si8e of 'ndian and 7S)79 market for a%tomo#iles is more or less the same #%t the 'ndian market has a lar$er $rowth potential than the 7S)79 market d%e to the low le&el of penetration! The la#or cost is low in 'ndia #%t the strin$ent la#or re$%lations erode this ad&anta$e! The le&el of infrastr%ct%re is #etter in 'ndia than 'ndonesia and the :hilippines #%t worse than that in other 7S)79 co%ntries! The fnancial and #ankin$ sector is #etter in 'ndia than in the 7S)79 co%ntries! There is a h%$e e/cess capacity in 7S)79 co%ntries, in comparisonwith that in 'ndia, which will help them to tackle the e/cess demand that mayarise in f%t%re! There is a -0-;0 per cent cost disad&anta$e for 'ndian companies on acco%nt of ta/ation and infrastr%ct%re and 4--0 per cent la#or cost ad&anta$e o&er compara#le 7S)79-mem#er-#ased companies! Similar fndin$s are noted in a st%dy #y the 7%tomoti&e "omponent *an%fact%rers 7ssociation of 'ndia ,7"*7, -00%ita#le arran$ement within themsel&es to ha&e a #alanced trade, with fair le&el of e/ports and imports! The 'ndian a%to ind%stry co%ld $ain from this :T7 with *)="(SU= only if it is ass%red of the #alanced trade, as *)="(SU= co%ntries practice amon$ themsel&es! 'mpact of 2T7 with So%th 7frica on the 'ndian a%tomo#ileind%stry? @e fnd that there are a few policies in So%th 7frica that indirectly s%#sidi8e the a%to ind%stry, %nlike 'ndia, in terms of fnancial $rants! Aence itis s%$$ested that 'ndia co%ld minimi8e losses only if it $oes for incl%sion of certain a%to components, which in&ol&e h%$e lo$istic costs of imports, creatin$ a nat%ral protection ,for e/ample, stampin$s, $lass, seats, plastics and tires. and those in which 'ndia enjoys economies of scale and is cost-competiti&e ,e!$! castin$s and for$in$s. in this 2T7! 'f So%th 7frica is ready to discontin%e the schemes s%ch as *otor 'nd%stry 3e&elopment :ro$ramme ,*'3:., 'ndia co%ld incl%de all a%tomoti&e components in this 2T7! There sho%ld #e a minim%m local content of 60 per cent and the a$reement sho%ld not #e trade #alancin$ as 'ndia will not $ain m%ch in that case!