According to data from the Society of Indian Automobile Manufacturers (SIAM), the automobile industry contributes nearly 15% of India's GST revenue. It also plays a vital role in employment generation, supporting an estimated 30 million jobs across the automotive value chain. Of these, about 4.2 million are direct jobs, while another 26.5 million are indirect, underscoring the sector's importance as both a revenue driver and a major source of livelihoods nationwide.
As per the report, the production, sales and exports of automobiles in India during January to December 2025 reflect the scale and diversity of the country's automotive industry. Passenger vehicles recorded production of 53.8 lakh units, with 44.9 lakh sold domestically and 8.6 lakh exported. Commercial vehicles followed with 11.1 lakh produced, 10.3 lakh sold, and 0.9 lakh shipped overseas.
In the three-wheeler segment, 12.2 lakh units were manufactured, of which 7.9 lakh were sold in India and 4.3 lakh exported. Two-wheelers dominated the sector, with 255 lakh units produced, 205 lakh sold, and 49.4 lakh exported, underscoring their continued popularity.
Further, the Ministry of Heavy Industries (MHI) is running several schemes to encourage domestic manufacturing and technological advancement in the automobile sector. One of these is the Production Linked Incentive (PLI) Scheme for the Automobile and Auto Component Industry, approved in September 2021 with an outlay of Rs 25,938 crore. It aims to strengthen India's capabilities in advanced automotive technology products, including electric vehicles, by offering financial incentives tied to domestic value addition and investment.
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Another initiative is the PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM EDRIVE) Scheme, launched in April 2024 with a budget of Rs 10,900 crore and running until March 2028. This program supports electric two-wheelers, three-wheelers, trucks, buses, and ambulances, while also aiding EV charging infrastructure and testing facilities. Buyers benefit from demand incentives in the form of upfront price reductions at the time of purchase.
Additionally, the Scheme for Promotion of Manufacturing of Electric Passenger Cars in India (SPMEPCI), notified in March 2024, focuses specifically on boosting the production of electric cars in the country.