Economic Survey 2026: Auto sales, exports and EV push signal resilient demand and structural shift
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India’s economic momentum remained firm in the third quarter of FY26, with high-frequency indicators pointing to sustained demand across both urban and rural segments, according to the Economic Survey 2025-26. The survey noted that automobile and tractor sales, along with air passenger traffic, continued to signal robust consumption conditions during the period.
Citing the November 2025 round of the NABARD Rural Economic Conditions and Sentiments Survey, the economic survey said 79.2% of rural households reported higher consumption over the past year, with the share of monthly income spent on consumption rising to around 67%, the highest since the survey’s inception. The survey attributed this trend to GST rate rationalisation and softer inflation, which have improved real purchasing power, particularly for rural non-farm incomes.
Auto sector anchors growth and revenues
The automotive industry remains a critical driver of economic growth, employment, and fiscal revenues, the Economic Survey 2025-26 said. India is the world’s largest market for two-wheelers and three-wheelers, and the third-largest globally for passenger vehicles (PV) and commercial vehicles (CV).
Supported by a vast manufacturing and auto component ecosystem, the sector provides direct and indirect employment to over 30 million people and contributes nearly 15% of India’s GST collections, underlining its importance to public finances, according to the Survey.
January 2026
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Exports and production see sustained expansion
The Economic Survey highlighted strong export performance, noting that over 5.3 million vehicles were exported in FY25 across passenger, commercial, two-wheeler and three-wheeler segments. Export momentum has continued into FY26, with double-digit growth recorded in the first half of the year, reflecting growing global acceptance of India-made vehicles.
On the production front, the survey said the automotive industry recorded nearly 33% growth over the past decade (FY15–FY25), supported by post-pandemic demand recovery and policy-led incentives.
Policy support accelerates EV transition
Government initiatives have played a key role in accelerating structural transformation, particularly in electric mobility, the Economic Survey 2025-26 said. The PLI scheme for automobiles and auto components has attracted ₹35,657 crore in cumulative investments and generated nearly 49,000 jobs as of September 2025, while the PLI ACC battery scheme is helping localise advanced battery manufacturing and strengthen the EV ecosystem.
Overall, the Economic Survey concluded that policy continuity, demand resilience and global integration position the automotive sector as a central pillar of India’s manufacturing and export strategy.