Running in the top gear

India is expected to be the world's third-largest automotive market in terms of volume by 2026.

The industry currently manufactures 25 mn vehicles, of which 3.5 mn are exported. 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.

Sale of passenger vehicles has increased by 2.7%, two-wheeler by 4.86% and three-wheeler by 10.27% during 2018-19 viz-a-viz 2017-18. In April-March 2019, overall automobile exports grew by 14.5%. The overall Commercial Vehicles segment registered a growth of 17.6% in April- March 2019.

The sector attracted $22.4 bn FDI during April 2000 - June 2019; accounting for 5.1% of the total FDI inflows.

100% FDI allowed under automatic route

For further details, please refer FDI Policy

  • 7.5 %

    Share in India's GDP

  • 19 mn

    Employment generated

  • 40 %

    Share in global R&D

  • 4.3 %

    Share in India's exports

Tractor Industry in India

World's largest tractor manufacturer and second largest bus manufacturer

Two Wheeler Industry in India

World’s largest two-wheeler and three-wheeler manufacturer

Indian Automobile Industry

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

Industry Scenario

The $74 bn Automobile industry is expected to reach $300 bn by 2026.

India's annual production has been 29.08 mn vehicles in 2018 as against 25.33 mn in 2017, registering a healthy growth of 14.8%. The industry is expected to reach 135 bn by 2020 and 300 bn by 2026 at a CAGR of 15%. 

The sub-sectors contribution to the overall market in 2017-18:

  • Two-Wheeler: 81%
  • Passenger vehicles: 13%
  • Three-Wheeler: 3%
  • Commercial vehicles: 3%

India's rapidly growing five auto hubs have a significant potential to be used as a base for export to South East Asia (SEA) and the Middle East and North African (MENA) regions. 

In April-March 2018, overall automobile exports increased by 16.12%. Two and Three Wheeler Segments registered a growth of 20.29% and 40.13% respectively.

Growth Drivers

  • Growing income

    3X increase in average household income from $ 6,393 in 2010 to $ 18,448 in 2020
  • '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
  • Open

    Motor Vehicles (Amendment) Act, 2019

    An Act to consolidate and amend the law relating to…

  • Open

    Automotive Mission Plan (2016-26)

    AMP aims to propel the Indian Automotive industry to be the…

  • Open

    Charging Infrastructure Guidelines, Mini…

    To enable faster adoption of EV in India by ensuring safe, r…

  • Open

    FAME India Phase - II

    To promote faster adoption and manufacturing of Electric and…

  • Open

    Faster Adoption and Manufacturing of Hyb…

    FAME is intended to support the hybrid/electric vehicles mar…

  • Open

    National Auto Policy (Draft)

    This policy aims to increase contribution to GDP, exports an…

  • Open

    National Automotive Testing and R&D…

    It aims to create a testing, validation and R&D infrastr…

  • Open

    National Electric Mobility Mission Plan…

    To emerge as a leader in electric vehicle market globally by…

  • Open

    Phased Manufacturing Programme for Elect…

    To promote the indigenous manufacturing of EVs

  • Open

    Tamil Nadu Electric Vehicle Policy 2019

    To make Tamil Nadu the preferred destination for the manufac…

Investible Projects

Investment Opportunities in Automobile

  • Projects


  • Opportunity

    $644.26 mn

  • Promoters


  • District


  • Private Projects


  • Govt. Projects



$630.15 mn

Sanand Auto Cluster Project [Ahmedabad]

State (s) Gujarat

$14.11 mn

Setting up an Automotive Manufacturing unit in Lucknow

State (s) Uttar Pradesh

Major Investors

Data on Map

  • Automobile Industry in India

Latest in Automobile


Asked Questions

  • For how long are the incentives for the electric and hybrid vehicles of the FAME scheme applicable?

    The Union cabinet chaired by the Prime Minister Shri Narendra Modi has approved the proposal for implementation of scheme titled 'Faster Adoption and Manufacturing of Electric Vehicles in India Phase II (FAME India Phase II)' for promotion of Electric Mobility in the country from 2019-20 to 2021-22.

    For more information, click here.

  • What is the Faster Adoption and Manufacturing of hybrid and Electric vehicles (FAME) scheme?

    The FAME scheme introduced in April 2012 is to be implemented over a period of 6 years till 2020 to support hybrid/electric vehicles market development and its manufacturing. Under this scheme, demand incentives will be availed by buyers (end users/consumers) upfront at the point of purchase and the same shall be reimbursed by the manufacturers from Department of Heavy Industries, on a monthly basis.

  • How do citizen avail the demand incentive on the purchase of a xEV?

    The demand incentive benefit will be passed on to the consumer upfront at the time of purchase of the xEV itself by way of paying reduced price.

    For more information, please visit the following link.

  • Is the FAME incentive applicable throughout the country?

    Presently scheme is applicable in selected areas like as notified separately broadly covering following cities:
    a) Cities under ’Smart Cities’ initiatives.
    b) Major metro agglomerations – Delhi NCR, Greater Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Ahmedabad.
    c) All State Capitals and other Urban Agglomerations/Cities with 1 Million+ population (as per 2011 census)
    d) Cities of the North Eastern States.
    However, for 2 and 3 wheeler, scheme is applicable in entire country.

    Please visit the link for more information.

  • Why FAME scheme is not applicable throughout the country?

    Phase I of the scheme is a sort of pilot project just to see the reaction of people to the electric and hybrid vehicles. If this phase is successful, in next phase, scheme will be applicable throughout the country. 

    For more information, please visit the following link.

View all