Indian Auto Industry Records Growth in Exports

India’s automobile exports crossed 53 lakh vehicles in FY25 across passenger vehicles, commercial vehicles, two-wheelers and three-wheelers. Shipments posted double-digit growth in the first half of FY26, according to the Economic Survey tabled in Parliament on Thursday. It said the performance reflects rising global acceptance of Indian-made vehicles. This comes at a time when manufacturers are expanding capacity and adding electric models to their export mix.

The survey said the auto industry recorded nearly 33% growth in production over the last decade (from FY15 to FY25). It added that the momentum has continued into FY26 because of policy incentives and improving market conditions.

Rising EV Registration

The survey also pointed towards the rising registration of electric vehicles (EVs). EV registrations grew at a CAGR of 62.5% between FY20 and FY25. The survey said this growth is due to a mix of demand incentives, supply-side support and expanding charging infrastructure.

Government schemes such as the Production Linked Incentive (PLI)-Auto Scheme, the PLI scheme for the National Programme on Advanced Chemistry Cell (ACC) Battery Storage, PM E-DRIVE and the PM e-Bus Sewa–Payment Security Mechanism (PSM) have played a key role in driving electric vehicle adoption, the survey said.

Battery Manufacturing and Charging Ecosystem

The survey highlighted progress under the PLI ACC scheme. The scheme has an outlay of ₹18,100 crores. It aims to support 50 GWh of battery manufacturing capacity. So far, 40 GWh of capacity has been awarded. This has helped localise advanced cell manufacturing and reduce dependence on imports.

This localisation is critical for the EV supply chain, as battery packs account for a significant share of vehicle costs. The survey said the scheme is strengthening the domestic EV ecosystem by encouraging integrated manufacturing and technology development.

The PM E-DRIVE scheme was launched in September 2024. It has an outlay of ₹10,900 crore and is providing demand incentives for electric two-wheelers and three-wheelers. It also extends support to newer categories such as electric trucks and ambulances. The scheme includes funding for charging infrastructure and upgrades to vehicle testing agencies, the survey said.

Jobs, Investment and Tax Support

The survey also said that the PLI scheme for automobiles and auto components has resulted in the creation of 48,974 jobs until September 2025. The scheme spans vehicle assembly, component manufacturing and advanced technology development.

The survey also pointed to the reduction in GST on small cars, two-wheelers and auto parts as a factor expected to support demand. It said the lower tax rates should help strengthen India’s automotive manufacturing base by improving affordability and boosting volumes.

Sectoral Impact and Investors’ Takeaways

The survey’s data shows that exports and EV adoption are becoming central to growth in the auto sector. For manufacturers, policy-backed investments and rising overseas demand offer visibility on capacity use and product expansion. For component makers and battery suppliers, the focus on localisation may mean steady order flows over the medium term.

For investors, the numbers suggest that government incentives and export momentum are shaping earnings prospects across the auto value chain. This is even as companies balance domestic demand with global market risks.

Sources:

Hindu Business Line

Economic Times