Snapshot
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 5.27% of the total FDI inflow as per the Jun 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.
- 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) – 52% in FY23 (vs. 49% in FY22 & 39% in FY21)
‒ M&HCVs (amongst CVs) – 37% in FY23 (vs. 34% in FY22 & 28% in FY21) - 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
- PM E-Bus Seva deploys 50,000 e-buses across 169 cities with INR 57,613 Cr investment, saving 29.5B fuel litres and reducing 7.6M CO₂ tonnes annually.
100% FDI allowed under automatic route.
For further details, please refer FDI Policy
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Explore Related Sub Sectors
Electric MobilityDiscover More
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
- FOREIGN INVESTMENT
- INDUSTRY TRENDS
- POLICIES & SCHEMES
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 2024, the government allocated INR 2671.33 Cr to FAME II and also also announced an Exemption of import duty on 25 minerals which also include lithium, cobalt, and nickel which are critical raw materials for battery manufacturing.
GROWTH DRIVERS
Growing income
India’s per capita Net National Income (NNI) increased by 46.61% from INR 72,805 in 2014-15 to INR 106,744 in 2023-24.
'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
Ministry
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Industrial Land Bank Portal
GIS - based map displaying available infrastructure for setting up business operations in the state.
Investible Projects
Investment Opportunities in Automobile
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