Domestic two-wheeler sales growth estimated at 6-9% in FY26: ICRA

India’s two-wheeler sales are projected to rise by 6-9% in FY26, supported by the recent reduction in Goods and Services Tax (GST) rates, steady replacement demand, urban demand recovery, and healthy rural incomes driven by a normal monsoon, according to ratings agency ICRA. Domestic wholesale volumes rose 7.2% YoY in August 2025 to 18,00,000 units as original equipment manufacturers (OEMs) maintained robust dispatches ahead of the festive season. Retail sales recorded a slower growth of 2.2% YoY, with demand partly impacted by heavy rainfall and purchase deferment linked to GST rate cuts. However, a pick-up in sales momentum is expected during the festive period. The electric two-wheeler segment maintained steady performance with 1,04,725 units sold in August 2025, up 1.8% sequentially, while penetration stayed in the 6-7% range.
The tractors segment also recorded strong momentum, aided by the GST rate cut to 5%, which is expected to drive festive season demand further. Wholesale tractor volumes surged 28.2% YoY in August 2025, contributing to a cumulative 11.7% growth in the first five months of FY26. Retail tractor sales also rose 30.1% YoY in August 2025, backed by positive farmer sentiment and adequate rainfall. ICRA projects tractor volumes to grow at a moderate 4-7% in FY26, supported by above-normal monsoon rainfall, which stood at 108% of the long-period average by September 17, 2025. The sector also anticipates potential pre-buying ahead of the TREM V emission norms, scheduled for implementation from April 1, 2026, which could further boost demand.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.