Regional Impact of Automobile Policy in India

In India, the performance of the automobile industry is considered as a key macroeconomic indicator due to its overwhelming contribution to the national economy. The sector is currently undergoing a transitional phase, spearheaded by the Electric Vehicle (EV) adoption as well as the COVID-19 pandemic which have been evaluated using the E3-India model. The automobile and auto-components industries have significant indirect impact on ancillary industries in smaller states, however, the magnitude of imports does not decrease due to limited domestic infrastructural capabilities. The impact of EVs should be simultaneously met with a transition in power sector towards RE sources, otherwise the contribution towards reduction in CO2 emissions will remain underwhelming. The pandemic which brought the automobile industry to a stand-still needs to be reinvigorated through various demand-side incentives to induce confidence amongst the manufacturers.