India's Two-Wheeler Industry Expected To Grow By 7–9% In FY2027, Exports To Outpace Domestic Market

According to a report by Crisil Ratings, India’s two-wheeler industry is projected to grow 7–9% in fiscal 2027, with total volumes likely to touch the 29-million-unit mark. The credit agency claims that the growth will be driven by stable domestic demand, improving affordability after the GST cut for two-wheelers under 350 cc, and continued strength in exports, which are expected to outpace the home market for the third consecutive year. With six original equipment manufacturers (OEMs) that account for nearly 95 per cent of industry volumes, the sector is poised for steady expansion supported by volume growth, premiumisation, and sustained profitability. Total volumes are likely to reach around 29 million units. 

The domestic market continues to account for nearly 80 per cent of total volumes. After a muted first half in fiscal 2026, demand improved from September following GST rate cuts that reduced prices by 7–8 per cent thereby boosting sales. Rural demand strengthened on the back of a healthy kharif crop and better farm incomes, while urban demand benefited from lower prices, easing inflation, and softer interest rates.

Commenting on the report, Anuj Sethi, Senior Director, Crisil Ratings, said "In fiscal 2027, we expect domestic two-wheeler volume to grow 6-8 per cent, broadly in line with the current fiscal. Motorcycles, which account for about 60 per cent of domestic volumes and remain the largest segment, are likely to see mid-single-digit growth, reflecting a mature commuter base and stable rural demand. Incremental growth is expected to come from scooters—early double-digit overall and mid teens for e-scooters—driven by rising urban usage, increasing female participation, and expanding last-mile mobility needs, thereby gaining share in the overall mix."

While commuter motorcycles continue to perform strongly, higher-capacity models (150-350 cc) have managed to improve their market share from 23 per cent to 25 per cent in this fiscal year. The proposed India–US trade agreement is expected to create incremental opportunities for motorcycles above 500 cc by lowering import duties and expanding consumer choices. However, this segment accounts for less than 1 percent thereby limiting its impact. Exports contribute about 20 per cent of overall volumes, and are set to remain a strong pillar of growth. 

Commenting on exports, Poonam Upadhyay, Director, Crisil Ratings, said "Two-wheeler exports are expected to remain a strong growth driver. Volume is likely to rise 21-23 per cent this fiscal and sustain mid-to-high teen growth in fiscal 2027, reflecting steady traction in overseas markets. Latin America, Africa and South Asia, together accounting for nearly 90 per cent of export volume, are expected to anchor this expansion as demand conditions remain stable. The continued efforts of OEMs to widen distribution reach, deepen dealership networks and strengthen commuter-focused product offerings should further support growth across these core regions."

Strong export momentum and steady domestic demand, including rising traction for higher-capacity motorcycles, are expected to drive 10–12 per cent revenue growth in fiscal 2027. This follows an anticipated 15–17 per cent growth in the current fiscal. Going forward, the growth trajectory of India’s two-wheeler industry will depend on rural and urban income trends, commodity price movements, and the pace of recovery in export markets. These factors will be critical in determining volume growth visibility and sustaining industry momentum in fiscal 2027 and beyond.