Auto industry remains a key driver of growth

The auto industry continues to play a crucial role in India's economic growth, as highlighted by the Society of Indian Automobile Manufacturers (SIAM). SIAM President Shailesh Chandra emphasized the sector's alignment with global and national priorities on sustainability, decarbonisation, and safety. In FY2025-26, the industry's contribution to the Indian economy exceeded Rs 22.75 lakh crore, accounting for approximately 15% of the country's GST collections.

The auto sector directly and indirectly employs over 30 million people, with a significant multiplier effect across related sectors and a robust supply chain network.

Passenger vehicles sales reached a record 4.6 million units in FY2025-26, a 7.9% increase from the previous year. Exports in this segment also hit a new high of 0.91 million units, growing by 17.5%. The two-wheeler segment saw the highest domestic sales of 21.71 million units, a 10.7% growth year-on-year. Exports of two-wheelers increased by 23.4% to 5.18 million units. Three-wheeler sales rose by 12.8% to 8.4 lakh units, with exports growing by 50.1% to 4.6 lakh units.

The commercial vehicle industry achieved the highest-ever domestic sales of 10.80 lakh units, a 12.6% increase. Exports grew by 17.4% to 95,000 units. The auto industry has also made strides in sustainability, decarbonisation, and safety. By April 1, 2025, all vehicles manufactured were fully E20-compliant gasoline vehicles, supporting India's goal of reducing crude imports and enhancing energy security.

The industry has seen a surge in electric vehicle (EV) adoption, with the share of EVs in the new vehicle fleet growing in double digits across passenger vehicles, two-wheelers, and three-wheelers in 2025-26. Total EV registrations reached 2.5 million units in FY2025-26, up 24.7% from the previous year. This growth is attributed to the close collaboration between the industry and the Government of India's PM E-DRIVE scheme.