South Asia shows a trend of being the most critical location for foreign investors, especially the case of India, and it is ready to liberalise its FDI regulations further to boost FDI inflows. The car industry is one of India’s most significant economic development drivers and a sector with significant involvement in international value chains. The COVID-19 epidemic had a significant influence on the volume of FDI inflows. However, the Indian government’s remarkable resilience led to significant policy changes and prompt decision-making that lessened the impact and allowed the industry to forge its course among India’s industrial sectors. While addressing the dearth of study on “self-reliant policy 2020,” which incorporates the subject of “Make in India and Make for the World” among international business experts, this dissertation seeks to improve upon current institutional theory on FDI literature.

FDI inflows in India increased as the automobile and automotive component industries expanded into electric vehicle segments. This paper examines the roles of government policy, infrastructure, and other enabling variables in that development. This research is accomplished by adopting a qualitative approach and a research design based on various case studies focusing on the recent FDI decisions made by multinational automakers. The results emphasise the significance of host government policy changes that impact how enterprises operate in the nation. There have been occasions where businesses have supported these reforms while others have opposed them. These many points of view have been discussed. The study examines numerous frameworks and national policies in India that support these advancements. India surpassed Japan and Germany as the third-largest auto market in the world in 2022, and demand for Indian cars is still rising domestically and abroad. Manufacturers are catching up in modernisation, digitalisation, and automation to satisfy consumers’ future expectations (including those of electric cars) and stay competitive.