India is the land of opportunity and promise. Its one billion strong population, its vast market potential and development opportunities. Its riches and its poverty, the historical grandness and the crumbling infrastructure. All contribute to forming a business opportunity that you dismiss at your peril. At the same time, India has been the country of disappointment. It has been the next big thing for many years, with analysts and commentators repeating themselves in stating that "this is India's decade", only to be disappointed by weaker growth than expected, by lower investment levels and a disappointing market performance. It is a country that is fiendishly difficult to govern, thanks to its highly autonomous federal states that are not willingly relinquishing power to the central government. Its national politics has been a family affair for decades, not solely to its benefit and its bureaucracy and red tape is world-class, if there is such a thing.  

So much potential, so much promise, yet a historic disappointment.  

Enter Narendra Modi in May 2014. His landslide victory for the Bharatiya Janata Party (BJP), built on a promise of "airing out the closet", shaking up central government, driving change and a pro-business sentiment, has transformed the sentiment around Indian business and politics. Suddenly, there is an air of hesitant expectations. Perhaps this time it is finally going to be India's decade? After all, Modi did deliver in the state he ran prior to the top job, creating an economic turnaround in Gujarat. Although his track record has been somewhat marred by the attribution of a share of the responsibility for failing to stop the Gujarat riots that claimed more than 1000 lives in 2002.  

Central to Modi's campaign has been a focus on re-launching India as a destination for foreign investment and manufacturing. The “Make in India” slogan was a key part of the promise to the electorate and in the fall of 2014 he toured the world to market himself and India as the future promise. Like a rock star, he was met by a crowd of close to 20 000 people in New York’s Madison Square Garden, an apt illustration of the renewed enthusiasm around India these days. Now all that remains is to deliver on the promise. That delivery should create an interesting momentum for the automotive industry in India.

The automotive industry in India has gone through a few difficult years, with very weak domestic market development threatening the viability of manufacturing investments made when things looked better. Forecasts now call for an improvement in the Indian sales growth, a welcome respite after the 8% sales drop in 2013. For the rest of the decade Indian auto sales are expected to grow by around 10% annually. On the back of recent weakness, Indian auto exports have been boosted, with almost 450 000 units shipped abroad in 2013 by blue chip OEMs to developed markets across the globe.. This development is thought to continue, even if the home market should really return to growth in the next years.

With the auto market getting back to form and a general Modi-fication of the Indian economy possibly affecting the economy to the better, the outlook for the Indian auto industry is thus better than in a long time. Domestic auto sales are forecasted to reach just above 5 million cars by 2020. If you compare this to the 30 million-ish sales expected in China in 2020, a country of comparable size and economic potential, it is clear that there is still a significant upside for the automotive industry in this land of promise.