Auto sector fuels India's $5 tn economy ambition with global momentum
As India accelerates towards its goal of becoming a $5 trillion economy, the automobile sector is cementing its position as a critical growth engine, contributing significantly to GDP, exports, and employment, reports IANS.
According to industry data for the financial year 2024–25, the auto sector now contributes approximately 7.1per cent to India's GDP and a substantial 49per cent to the manufacturing GDP. It also supports over 3.7 crore jobs and accounts for nearly 8per cent of India's total exports, underlining its strategic role in the country's economic ecosystem.
More than just a commercial industry, the automotive sector has become a symbol of India's expanding prowess in global manufacturing and innovation. With rising vehicle demand and enhanced production capabilities, India has emerged as the third-largest automobile market by sales and fourth-largest by production globally.
FY25 performance
In FY25, the country produced over 31 million vehicles across segments. This includes more than 5 million passenger cars, 1 million commercial vehicles, 1 million three-wheelers, and nearly 24 million two-wheelers.
India's
automotive exports
are also gaining momentum, with around 5.7 million vehicles shipped to destinations such as Japan, Mexico, Latin America, and Africa. This export surge is supported by a favourable policy environment that promotes domestic manufacturing, clean mobility, and integration into global supply chains.
A cornerstone of this push is the Production Linked Incentive (PLI) scheme for the automobile and auto components sector, which has a total outlay of ₹25,938 crore. The scheme is designed to incentivize advanced automotive technologies, including electric vehicles (EVs), hydrogen-powered vehicles, autonomous systems, and other futuristic mobility solutions.
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