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India's auto industry gears up for growth, driven by EV push and job boom: Report

IANS March 15, 2025 162 views

India's automotive industry is poised for significant growth, driven by government policies and expanding electric vehicle markets. The FAME II scheme has been instrumental in promoting EV adoption across multiple cities. Major metropolitan areas like Mumbai and Hyderabad are expected to experience strong sectoral expansion, supported by robust service sector job opportunities. Regional variations and government initiatives will continue to shape the industry's development in the coming years.

"Regional dynamics greatly influence the trajectory of the market" - Madhuchhanda Palit, GlobalData Automotive Analyst
India's auto industry gears up for growth, driven by EV push and job boom: Report
New Delhi, March 15: India's automotive sector is expected to witness positive growth in the coming year, driven by supportive government policies and a growing job market, according to a report.

Key Points

1

FAME II scheme accelerates electric vehicle adoption

2

Major cities like Mumbai and Hyderabad show strong growth potential

3

Service sector expansion drives automotive market transformation

The primary reason behind the growth is the impact of the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME II) scheme, which has been in effect since April 2019.

This policy encourages states to offer financial and non-financial incentives to boost the adoption of electric vehicles (EVs), contributing to the sector’s expansion.

According to data analytics firm GlobalData report, about 24.7 per cent of these cities are likely to experience strong growth in the automotive sector, while 49.5 per cent are expected to see moderate growth.

Cities like Mumbai, Hyderabad, and Pune are among those projected to thrive. On the other hand, about 7.5 per cent of cities may see stagnant growth, while 9.7 per cent and 15.5 per cent could experience moderate and pessimistic declines, respectively.

Chandigarh is one of the cities expected to face challenges in automotive growth. Hyderabad and Mumbai, in particular, are well-positioned for expansion due to their growing service sector and job opportunities.

Hyderabad has seen a surge in employment, supported by government initiatives promoting start-ups and entrepreneurship.

The state government’s focus on information technology (IT) and IT-enabled services (ITES) has played a crucial role in job creation.

Additionally, continuous improvements in infrastructure, including roads, transportation, and power supply, have made the city attractive for businesses and workers.

The survey, conducted across 31 major cities, found that the increase in the workforce has, in turn, driven demand in the automotive sector.

"While the overall growth of the automotive sector is promising, regional dynamics greatly influence the trajectory of the market," Madhuchhanda Palit, Automotive Analyst at GlobalData, said.

She added that factors such as advancements in the service sector, the availability of job opportunities, industrialisation, and state government initiatives play pivotal roles in shaping the growth of the sector across different regions.

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