This paper explores the emergence, consolidation and challenges to India’s small car path in the passenger car industry. The paper shows that this path can only be properly understood if we consider the interplay of a wider range of context conditions, including political, social, economic and infrastructural conditions. The paper shows that while the state has played a pivotal role in creating the path, it was the socio-economic conditions that channelled the political choices. The paper also shows that although the government’s role in developing and sustaining the path has changed from an entrepreneurial to a framework setting role, the.