Advantage India
Growing
Demand
*Rising middle-class income and young population will result in strong demand growth.
*The Indian automotive industry is targeting to increase the export of vehicles by five times between 2016-26.
*Automobile exports from India rose 19% to over 5.3 million units in FY25, led by strong demand for passenger vehicles, two-wheelers, and commercial vehicles abroad.
*The total production of Passenger vehicles*, three wheelers, two wheelers and quadricycle in the month of June 2025 was ~24 lakh units a ~17% growth over June 2023.
Opportunities
*Focus shifting on electric cars to reduce emissions.
*Government aims to transform India into an R&D hub.
*India could be a leader in shared mobility by 2030, providing opportunities for electric and autonomous vehicles.
*The electric vehicles industry is likely to touch Rs. 20,00,000 crore (US$ 234 billion) and will create around five crore jobs by 2030.
Rising
Investment
* India offers 10-25% operational cost savings for auto firms compared to Europe and Latin America.
* The automobile sector attracted Rs. 2,48,683 crore (US$ 29.10 billion) in equity FDI between April 2000 and March 2025.
* India is set to become the largest EV market by 2030, with an investment potential exceeding US$ 200 billion over the next five years.
* The PLI scheme for automobiles and auto components received Rs. 2,818.9 crore (US$ 325.6 million) in FY26.
Policy
Support
*Automotive Mission Plan 2016-26 is a mutual initiative by the Government of India and the Indian automotive industry to lay down the roadmap for the development of the industry.
*The Centre has launched the PM E-DRIVE scheme with a budget of US$ 1.30 billion (Rs. 10,900 crore), effective from October 1, 2024, to March 31, 2026. The initiative aims to accelerate the adoption of electric vehicles (EVs), establish charging infrastructure, and develop an EV manufacturing ecosystem in India.
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