India's automobile sector achieved its record annual sales in FY 2025-26 for all key vehicle categories, bolstered by GST 2.0 reforms, several repo rate reductions, and adjusted income tax brackets that enhanced affordability and consumer confidence. Per the Society of Indian Automobile Manufacturers (SIAM), sales of passenger vehicles climbed 8% to 4.64 million units, whereas commercial vehicle sales grew by 12.6% to 1.08 million units, three-wheeler sales rose 12.8% to 0.84 million units, and two-wheeled vehicle sales increased by 10.7% to 21.71 million units. The year also marked the first overall sales record since FY19, demonstrating the sector’s robust rebound from the pandemic-driven demand decline. Vehicle exports across various categories increased by 24% to reach 6.65 million units, reinforcing India's position as a global hub for automotive manufacturing and exports. The robust growth is strategically important for India’s manufacturing sector, as increasing vehicle demand is anticipated to boost investments in auto components, EV systems, dealership networks, financing ecosystems, and rural mobility markets. SIAM emphasised that the year ended on a positive note after a slow beginning, with favourable sentiment fueled by reduced borrowing expenses and tax relief initiatives. The momentum further strengthens India’s status as one of the fastest-growing automobile markets globally, while bolstering downstream growth in steel, tires, batteries, electronics, and logistics services. Nevertheless, industry executives are carefully observing geopolitical threats and possible fluctuations in commodity prices resulting from tensions in West Asia.