Running in the top gear

India is the world’s third-largest Automobile market

The Automobile industry produced a total 28.43 Mn vehicles including Passenger Vehicles, Commercial Vehicles, Three Wheelers, Two Wheelers, and Quadricycles in Apr 2023 to Mar 2024. India holds a strong position in the international heavy vehicles arena as it is the largest tractor manufacturer, second-largest bus manufacturer, and third largest heavy trucks manufacturer in the world.

  • Automobile Sector resulted in 5.34% of the total FDI inflow as per the Mar 2024 DPIIT Report.
  • The EV market is expected to grow at CAGR of 49% between 2022-2030 and the EV industry would create 5 Mn direct and indirect jobs by 2030.
  • A market size of $50 Bn for the financing of EVs in 2030 has been identified, about 80% of the current size of India’s retail vehicle finance industry, worth $60 Bn now.
  • India’s trucking market is expected to grow over 4x by 2050. The number of trucks is expected to more than quadruple, from 4 Mn in 2022 to roughly 17 Mn trucks by 2050.
  • As per the Society of Indian Automobile Manufacturers (SIAM), the Auto industry generates employment of 13 persons for each truck, 6 persons for each car and four persons for each three wheelers and one person for each two-wheelers
  • There is a shift in preferences of the customers as they have started to move towards larger/more powerful vehicles across all segments:
    ‒ UVs (amongst PVs) – 49% in FY22 (vs. 39% in FY21) 
    ‒ M&HCVs (amongst CVs) – 33% in FY22 (vs. 28% in FY21) 

100% FDI allowed under automatic route.

For further details, please refer FDI Policy

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    Share in India's GDP

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    Share in global R&D

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    Share in India's exports

Explore Related Sub Sectors

India is the world’s largest manufacturer of two-wheelers, with over 21 Mn produced annually.

India is the world largest manufacturer of tractors.

World’s third largest heavy truck manufacturer and fourth largest car manufacturer

Industry Scenario

India aims to double its auto industry size to INR 15 Lakh Cr by end of year 2024.

In the Automobile market in India, Two-wheelers and passenger cars accounted for 75.3% and 17.6% market share, respectively. Passenger car sales are dominated by small and midsized cars.

Export of total number of automobiles in 2023-24 was recorded at 45,00,492 out of which two wheelers accounted for about 76.8% of the total exports. 

In Apr 2023 to Mar 2024, Passenger Vehicle Exports increased from 6,62,891 to 6,72,105 units, registering a positive growth of 13.8%.  

In the Union Budget 2023, the government has increased the budget allocation of FAME II by 78%.


  • Growing income

    India’s per capita Net National Income (NNI) increased by 35.12% from INR 72,805 in 2014-15 to INR 98,374 in 2022-23.

  • 'Youngest Nation' by 2025

    India to become the youngest nation by 2025 with an average age of 25 years

  • Vehicle penetration

    Expected to reach 72 vehicles per 1000 people by 2025

  • Expanding R&D hub

    India accounts for 40% of total $31 Bn of global engineering and R&D spend. 8% of the country’s R&D expenditure is in the automotive sector.

  • Atmanirbhar Bharat Abhiyaan - Self Reliant India

    Special economic and comprehensive package of INR 20 Lakh Cr towards promoting manufacturing in India.


Production Linked Incentive (PLI) Scheme

The Union Cabinet chaired by the Prime Minister, Shri Narendra Modi announced the Production-Linked Incentive (PLI) Scheme in the Automobile and Auto Components sectors. The PLI scheme (outlay of $3.5 Bn) for the automobile sector proposes financial incentives of up to 18% to boost domestic manufacturing of advanced automotive technology products and attract investments in the automotive manufacturing value chain. Incentives are applicable for determined sales of products manufactured in India from April 1, 2022, for a period of five consecutive years.

The Ministry of Heavy Industries has announced the extension of the tenure of the Production Linked Incentive (PLI) Scheme for Automobile and Auto Components by one year. Under the amended scheme, the incentive will be applicable for a total of five consecutive financial years, starting from the financial year 2023-24.

Recent Developments:
1) Total of 115 companies had filed their application under this scheme. Out of 115, total 85 applicants have been approved under this PLI scheme - 18 applicants for Champion OEM Incentive scheme and 67 applicants have been approved under Component Champion Incentive scheme.
2) The scheme has been successful in attracting proposed investment of INR 67,690 Cr against the target estimate of investment INR 42,500 Cr over a period of five years.
3) Apart from Indian business groups, approved applicants for Champion OEM Incentive scheme include groups from countries such as Republic of Korea, USA, Japan, France, Italy, UK and Netherlands.

  • INR 25,938 Cr

    Scheme Outlay

Industrial Land Bank Portal

GIS - based map displaying available infrastructure for setting up business operations in the state.

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    Asked Questions

    Applications will be invited within 60 days of notification of this scheme. The window for receiving applications through the Notice Inviting Applications will be for a period of 60 days. What is the duration of the Application Window? Is the Application Window open?

    As per paragraph 5 of the notification dated 09/11/2021 regarding (i) Application Form and (ii) List of Advanced Automotive Technology Products, the window for receiving applications through the Notice Inviting Applications will be open for a period of 60 days from the date of its publication in the official Gazette. Accordingly, the window for receiving Applications is already open with effect from 11th November, 2021 till 23:59:59 hours IST on 9th January, 2022.

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    Whether expenditure related to Transfer of Technology (ToT) Agreements including the purchase of technology are covered as eligible investment under the scheme?

    As per question 47 of the FAQs dated 8th October, 2021, the capital expenditure on Engineering Research & Development (ER&D) and product design & development is allowed under the scheme. It is further clarified that the Capital expenditure on ER&D and product design & development related to the eligible products shall be allowed for the purpose of Investment under the Scheme. The term “related” here refers to all stages in the entire value chain of the goods proposed to be manufactured including software integral to the functioning of the same. Such expenditure shall include expenditure on in-house and captive ER&D, directly attributable to eligible products, including all stages in the entire value chain of the goods proposed to be manufactured including software integral to the functioning of the same. Such expenditure shall include test and measuring instruments, prototypes used for testing, purchase of design tools, software cost (directly used for ER&D) & license fees, expenditure on technology & transfer of technology (ToT) Agreements including the purchase of technology, IPR, Patents and copyrights for ER&D, subject to all relevant documents for same being submitted to MHI/ PMA.

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    Can the revenue/ investment/ net worth of individual promoters of the companies/ group companies be considered under Global group revenue/ Global Investment/ Global net worth, respectively, for eligibility under the Scheme?

    No. Revenue/ investment/ net worth of individual promoters will not be considered under Global group revenue/ Global Investment/ Global net worth, respectively, for eligibility under the Scheme because the scheme recognises company/ group company(ies), not individual promoters.

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    The scheme covers group companies. If two companies are having common one or more individual promoter(s), who is/ are directly or indirectly able to control such two companies by 26% or more voting rights or appointment of more than 50% Board members, can such two companies be treated as group companies under the scheme?

    Yes, as per clause 2.17 of the guidelines, such companies shall be treated as group companies under the Scheme.

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    Who is the Project Management Agency (PMA) for PLI-AUTO?

    IFCI Limited (IFCI), having its Registered and Head/ Corporate Office at IFCI Tower, 61 Nehru Place, New Delhi – 110019, has been appointed as PMA for the Scheme. Email ID of the PMA is

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