The foreign car majors, on the other hand, brought the technology, the designs, as well as the brand equity. In addition, Indian partners have been hampered by the fact that the restructuring of the corporate sector has resulted in precious little spare cash being available, and they have been unable, or unwilling, to pump in their share of the additional equity required for expansion.

The joint ventures have been used by foreign companies to test the domestic market before deciding on full commitment. For their part, the Indian partners have been quite content to book profits by exiting at a higher price.

Does this mean that swadeshi interests are beinghampered? Certainly not. Firstly, the Tatas have mounted a strong local challenge. But perhaps more importantly, the structure of the automobile industry is such that foreign manufacturers will have to focus on indigenisation if they are to become price-competitive in the Indian market. Progressive indigenisation is, therefore, imperative.

This means that the cars will be manufactured in India and not merely assembled, which, in turn, implies that all the benefits of the linkages of the auto industry will accrue to this country. The automobile industry has proved to be a powerful driver of economic growth in many countries, and we need all the investment we can have in this sector.