The Indian auto industry is one of the largest in the world, accounting for a significant amount in the total GDP of the country. India is a prominent name amongst heavy truck and tractor manufacturers. 100 percent Foreign Direct Investment (FDI) is allowed in the automobile sector under the automatic route.

The automobile industry of India, although advanced, has tremendous scope for development. Foreign investment will bring new opportunities and possibilities in the sector. The basic advantage of FDI is the inflow of Capital in the automobile industry. FDI will bring with it technological progress, which will directly lead to economic development. A foreign investment in India will stimulate industrialization, leading to more job opportunities.