The current fiscal year is expected to be positive for the Indian two-wheeler market. Sales could see a growth of up to 9 percent. According to rating firm ICRA, the Indian two-wheeler segment could grow by up to 9 percent during this fiscal year compared to last year. The firm has made this expectation based on several factors. According to the report, continuously increasing replacement demand, recovery of consumption in cities, and normal monsoons leading to improved rural income are factors that will play a significant role in growth.
Prime Minister Narendra Modi has indicated that the central government is working on a simplified GST system. Under this, there could be a reduction in GST on small passenger vehicles and two-wheelers. This decision may be taken before the festive season. This GST cut will give an additional boost to the two-wheeler industry. Also, the upcoming festive season is considered the most beneficial time for auto companies. This will help in accelerating sales and demand.
ICRA’s report states that the outlook for fiscal year 2026 (FY2026) is positive. This is because of factors boosting demand and the potential reduction in GST rates, which could further accelerate market growth. In July 2025, wholesale sales of two-wheelers in India increased by 9% to 15 lakh units. Companies (OEMs) maintained good supply before the festivals. However, retail sales decreased by 6.5% year-on-year in July, due to weak demand in cities and a decrease in the number of buyers in rural areas due to heavy rains. The rating agency estimates that retail demand will improve significantly during the festivals.
ICRA stated that exports of two-wheelers increased by 32% in July 2025, which provided good support to the industry. Meanwhile, there was a slight decline in the sale of electric two-wheelers. In July, it decreased to 1,02,900 units, a decrease of about 2%. However, ICRA says that the share of electric two-wheelers has remained stable at between 6-7% of the total domestic two-wheeler market.