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GATE XH-C5 · 2021 · XH-B1

Question 15: Reading Comprehension

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Question 15

XH-B1MSQ2 marksNeeds review
The truth is that, despite the recent success of car-makers P and Q, India’s automobile industry is in a state not that different from the bad old days of the license-permit quota raj when carmakers dominated a captive domestic market with substandard vehicles and with very little, if any, research and development, and low to negligible productivity growth. High tariff barriers have certainly induced foreign automobile makers to enter the Indian market by setting up local operations, but this so-called “tariff jump” foreign investment has produced an industry that is inefficient, operating generally at a low scale, and whose products are not globally competitive either in terms of cost or of innovation. It is noteworthy that the automobile parts industry, which has faced low tariffs (as low as 12.5%) and has been largely deregulated, has been characterised by higher productivity and much better export performance than the completely-built units’ sector in the years since liberalisation.
(Adapted from an Op-Ed in The Mint.)
Which of the following statements can be inferred from the above?
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2021XH-B1

GATE XH-C5 2021 · Paper 1

Humanities and Social Sciences (Psychology) · Original paper archive

Section
Section XH-B1
Question type
Multiple select (MSQ)
Marks
2 marks
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