{"id":51126,"date":"2025-08-12T20:38:15","date_gmt":"2025-08-12T15:08:15","guid":{"rendered":"https:\/\/www.nextias.com\/ca\/?p=51126"},"modified":"2025-08-12T20:38:28","modified_gmt":"2025-08-12T15:08:28","slug":"india-world-third-largest-automobile-market","status":"publish","type":"post","link":"https:\/\/www.nextias.com\/ca\/current-affairs\/12-08-2025\/india-world-third-largest-automobile-market","title":{"rendered":"India Becomes World\u2019s Third-Largest Automobile Market"},"content":{"rendered":"\n<p><strong>Syllabus: GS3\/ Economy<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Context<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The Union Minister for Road Transport and Highways has announced that India has emerged as the third-largest automobile industry globally, with a market size of about <strong>\u20b922 lakh crore.<\/strong><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>About the Automobile Industry<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Global Scenario: The United States<\/strong> has the largest automobile industry in the world, valued at<strong> \u20b978 lakh crore.<\/strong>\n<ul class=\"wp-block-list\">\n<li><strong>China ranks second<\/strong> with an industry size of <strong>\u20b949 lakh crore.<\/strong><\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Indian Scenario: <\/strong>India\u2019s automotive industry is a cornerstone of the nation\u2019s manufacturing and economic growth, contributing around <strong>7.1%<\/strong> to India\u2019s <strong>Gross Domestic Product (GDP)<\/strong> and <strong>49%<\/strong> to manufacturing GDP.\n<ul class=\"wp-block-list\">\n<li>Two-wheelers and passenger vehicles dominate the domestic market.\u00a0<\/li>\n\n\n\n<li>In FY25, two-wheelers accounted for <strong>76.57%<\/strong> of total market share, while passenger cars accounted for <strong>16.80%.<\/strong><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full is-resized\"><img data-dominant-color=\"dfc3a2\" data-has-transparency=\"false\" loading=\"lazy\" decoding=\"async\" width=\"635\" height=\"437\" src=\"https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2025\/08\/India-Becomes-Worlds-Third-Largest-Automobile-Market.png\" alt=\"India-Becomes-Worlds-Third-Largest-Automobile-Market\" class=\"not-transparent wp-image-51128\" style=\"--dominant-color: #dfc3a2; width:519px;height:auto\" srcset=\"https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2025\/08\/India-Becomes-Worlds-Third-Largest-Automobile-Market.png 635w, https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2025\/08\/India-Becomes-Worlds-Third-Largest-Automobile-Market-300x206.png 300w\" sizes=\"auto, (max-width: 635px) 100vw, 635px\" \/><\/figure>\n<\/div>\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full is-resized\"><img data-dominant-color=\"1645aa\" data-has-transparency=\"false\" loading=\"lazy\" decoding=\"async\" width=\"419\" height=\"429\" src=\"https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2025\/08\/india-current-position-in-the-automotive-ecosystem.png\" alt=\"india-current-position-in-the-automotive-ecosystem\" class=\"not-transparent wp-image-51127\" style=\"--dominant-color: #1645aa; width:373px;height:auto\" srcset=\"https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2025\/08\/india-current-position-in-the-automotive-ecosystem.png 419w, https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2025\/08\/india-current-position-in-the-automotive-ecosystem-293x300.png 293w\" sizes=\"auto, (max-width: 419px) 100vw, 419px\" \/><\/figure>\n<\/div>\n\n\n<h2 class=\"wp-block-heading\"><strong>Government Initiatives Driving Growth<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Production Linked Incentive (PLI) Scheme for Auto and ACC Batteries: <\/strong>With a total allocation of <strong>\u20b944,038 crore<\/strong> the initiative aims to boost the domestic manufacturing of advanced automotive technologies, including EVs, hydrogen fuel cell vehicles, and advanced battery storage solutions.<\/li>\n\n\n\n<li><strong>FAME-II Scheme: <\/strong>The scheme provides subsidies for electric and hybrid vehicles and charging infrastructure, supporting the adoption of eco-friendly vehicles and contributing to cleaner transportation.<\/li>\n\n\n\n<li><strong>Vehicle Scrappage Policy: <\/strong>Targets phasing out vehicles older than 15 years to cut emissions and stimulate replacement demand.<\/li>\n\n\n\n<li><strong>Make in India and FDI Policy: <\/strong>The policies, particularly the <strong>100% FDI <\/strong>allowance in the auto sector, have attracted significant investments from both global and domestic players, boosting manufacturing and employment.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>What are the Challenges?<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Heavy dependence on imports <\/strong>for high-value components such as semiconductors and EV batteries.<\/li>\n\n\n\n<li><strong>Limited share of only about 3%<\/strong> in the globally traded auto components market, with low penetration in high-precision segments.<\/li>\n\n\n\n<li><strong>Inadequate infrastructure for EV<\/strong> charging and hydrogen refuelling stations.<\/li>\n\n\n\n<li><strong>Environmental Challenges:<\/strong> Rising vehicle numbers leading to increased carbon emissions and environmental concerns.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Way Ahead<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Increase localisation<\/strong> in high-technology automotive components to reduce import dependence.<\/li>\n\n\n\n<li><strong>Expand investments in EV charging networks<\/strong> and hydrogen fuel infrastructure.<\/li>\n\n\n\n<li><strong>Enhance research and development <\/strong>and provide skill training for advanced manufacturing capabilities.<\/li>\n\n\n\n<li><strong>Promote recycling<\/strong>, emission control measures, and adoption of<strong> green mobility solutions<\/strong> for sustainable growth.<\/li>\n<\/ul>\n\n\n\n<p><strong>Source: <\/strong><a href=\"https:\/\/www.newsonair.gov.in\/india-becomes-worlds-third-largest-automobile-market-nitin-gadkari\/#:~:text=Addressing%20the%20Green%20Revolution%20-2025,50%2\" rel=\"nofollow noopener\" target=\"_blank\"><strong>AIR<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<h3><strong>Context<\/strong><\/h3>\n<li class=\"ms-5\">The Union Minister for Road Transport and Highways has announced that India has emerged as the third-largest automobile industry globally, with a market size of about \u20b922 lakh crore.<\/li>\n<p><\/p>\n<h3><strong>About the Automobile Industry<\/strong><\/h3>\n<li class=\"ms-5\">Global Scenario: The United States has the largest automobile industry in the world, valued at \u20b978 lakh crore.<\/li>\n<li class=\"ms-5\">China ranks second with an industry size of \u20b949 lakh crore.<\/li>\n<li class=\"ms-5\">Indian Scenario: India\u2019s automotive industry is a cornerstone of the nation\u2019s manufacturing and economic growth, contributing around 7.1% to India\u2019s Gross Domestic Product (GDP) and 49% to manufacturing GDP.<\/li>\n<li class=\"ms-5\">Two-wheelers and passenger vehicles dominate the domestic market.\u00a0<\/li>\n<p><a href=\"https:\/\/www.nextias.com\/ca\/current-affairs\/12-08-2025\/india-world-third-largest-automobile-market\" class=\"btn btn-primary btn-sm float-end\">Read\u00a0More<\/a><\/p>\n","protected":false},"author":15,"featured_media":51148,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-51126","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-current-affairs"],"acf":[],"jetpack_featured_media_url":"https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2025\/08\/india-world-third-largest-automobile-market.png","_links":{"self":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/51126","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/comments?post=51126"}],"version-history":[{"count":2,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/51126\/revisions"}],"predecessor-version":[{"id":51165,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/51126\/revisions\/51165"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media\/51148"}],"wp:attachment":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media?parent=51126"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/categories?post=51126"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/tags?post=51126"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}