India Automotive Industry Market Size

Increasing demand for cars is driving the market growth

In India, the automobile industry contributes 7.1% of the country's GDP and 49% of the manufacturing GDP. As a result, India's car industry plays a big role in both macroeconomic expansion and technological improvement. Therefore, the government's main goal is to increase the automobile industry's share by enacting new laws and programs. The Indian government anticipates that 8–10 billion USD in local and foreign investment will reach the automotive sector by 2023. For instance, as part of a larger series of nation-building initiatives, the Prime Minister unveiled the Made in India program in 2014.

The goal of Make in India was to turn India into a powerhouse for global design and manufacturing in response to a critical situation. In order to meet the growing demand for automobile production in the nation, numerous manufacturers are investing in both new and existing plants. Furthermore, the Indian government unveiled a new car scrappage strategy in 2021, with the main goal being to locate and remove unsafe cars from the road.

This reduces the amount of greenhouse gases that the older cars emit and makes room for the new car that complies with BS6 (Bharat Stage 6 - equivalent to Euro6) emission standards. This will boost the market CAGR.

Around 300,000 electric cars were sold in India in 2021—a 168% increase over the 100,000 units sold the year before. Sales of passenger EVs in India tripled to approximately 15,000 units in 2021, and they are still exhibiting growth.In response to increasing urbanization, the Indian government has launched various programs to encourage the production and use of electric vehicles domestically.

The goal is to lower emissions and advance e-mobility.The Faster Adoption and Manufacturing of Hybrid & Electric Vehicles in India (FAME I and II) and the National Electric Mobility Mission Plan (NEMMP) also contributed to generating the early interest in and exposure to electric mobility.

Furthermore, to support the indigenous electric vehicle industry, the Indian government has also given tax breaks and subsidies to EV producers and users. The government has put a 15% customs tariff on parts used to make electric vehicles and a 10% duty on imported lithium-ion cells in accordance with the phased production proposal. Additionally, manufacturers are investing in the development of new technologies and electric infrastructure in addition to increasing its production capacity to meet the demand brought about by the rising sales of electric vehicles in India. Thus, driving the Market revenue.

Sustainability trends are increasingly shaping the Global India Automotive Industry, as consumers and manufacturers alike prioritize eco-friendly practices. The shift towards electric vehicles and hybrid models reflects a growing awareness of environmental issues. In response to this trend, the industry is expected to witness a compound annual growth rate of 7.84% from 2025 to 2035, indicating a strong commitment to reducing carbon footprints. Manufacturers are investing in sustainable materials and production processes, which not only appeal to environmentally conscious consumers but also align with global sustainability initiatives. This focus on sustainability may redefine market dynamics in the coming years.

The Global India Automotive Industry is currently witnessing a surge in consumer demand, driven by rising disposable incomes and urbanization. In 2024, the market is valued at approximately 235.94 USD Billion, reflecting a robust appetite for personal and commercial vehicles. This demand is further fueled by a younger demographic that increasingly seeks mobility solutions. As urban areas expand, the need for efficient transportation options becomes paramount. Consequently, manufacturers are adapting their offerings to meet these evolving preferences, which may contribute to the industry's growth trajectory in the coming years.

The Global India Automotive Industry is poised for substantial growth, with projections indicating a market value of 541.32 USD Billion by 2035. This anticipated growth reflects a combination of factors, including increased consumer demand, technological advancements, and supportive government policies. The industry is likely to evolve rapidly, adapting to changing consumer preferences and global trends. As manufacturers innovate and expand their product offerings, the market may experience significant transformations. These projections suggest a dynamic future for the automotive sector in India, with opportunities for both domestic and international players.

Infrastructure development is a crucial driver for the Global India Automotive Industry, as improved road networks and transportation facilities enhance vehicle accessibility. The government's focus on expanding highways, expressways, and urban transport systems is likely to facilitate smoother logistics and commuting experiences. This development not only supports the automotive sector but also encourages investments in related industries such as logistics and supply chain management. As infrastructure continues to evolve, it may lead to increased vehicle sales and usage, thereby contributing to the overall growth of the automotive market in India.

Technological innovation plays a pivotal role in shaping the Global India Automotive Industry. The integration of advanced technologies such as electric vehicles, autonomous driving, and connected car features is transforming the market landscape. These advancements not only enhance vehicle performance but also improve safety and fuel efficiency. As the industry moves towards sustainability, electric vehicles are gaining traction, with manufacturers investing heavily in research and development. This focus on technology is likely to attract a broader consumer base, thereby propelling the market forward as it adapts to the demands of modern consumers.

Government initiatives significantly influence the Global India Automotive Industry, with policies aimed at promoting electric mobility and reducing emissions. The Indian government has introduced various schemes to incentivize electric vehicle adoption, such as subsidies and tax benefits. These measures are expected to stimulate market growth, as they align with global sustainability goals. Furthermore, the government's push for local manufacturing under initiatives like 'Make in India' is likely to enhance the competitiveness of domestic players. Such supportive policies may create a conducive environment for investment and innovation within the industry.

Leading market players are investing heavily in research and development in order to expand their product lines, which will help the India Automotive Industry Market, grow even more. Market participants are also undertaking a variety of strategic activities to expand their  footprint, with important market developments including new product launches, contractual agreements, mergers and acquisitions, higher investments, and collaboration with other organizations. To expand and survive in a more competitive and rising market climate, automotive industry industry must offer cost-effective items.