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India is expected to be the world's third-largest automotive market in terms of volume by 2030. The $222 bn Automobile industry is expected to reach $300 bn by 2026.

The Automobile industry produced a total 22.93 mn vehicles including Passenger Vehicles, Commercial Vehicles, Three Wheelers, Two Wheelers, and Quadricycles in April 2021 to March 2022. 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.

  • The EV market is expected to grow at CAGR of 49% between 2022-2030 and is expected to hit 10 mn-unit annual sales by 2030. The EV industry will create fifty 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 today.
  • India's passenger vehicle industry is expected to post a growth of 16% in FY23.
  • India’s Automotive Industry is worth more that $222 bn and contributes 8% of the country’s total export and accounts for 7.1% of India's GDP and is set to become the 3rd largest in the world by 2030.

100% FDI allowed under automatic route.

 

In the Automobile market in India, Two-wheelers and passenger cars accounted for 76% and 17.4% market share, respectively. Passenger car sales are dominated by small and midsized cars.

Production Linked Incentives (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 scheme was closed on 9th January 2022. Total 95 applicants have been approved under this PLI scheme: 20 under Champion OEM and 75 under Component champion.