ICRA Forecasts Moderate Growth in India’s Two-Wheeler Market for FY2027
ICRA projects 3-5% growth in domestic two-wheeler volumes for FY27
Image: Business Standard
The domestic two-wheeler industry in India is expected to grow by 3-5% year-on-year in FY2027, driven by regulatory reforms and replacement cycles. However, growth may be limited by a high statistical base and adverse weather conditions. Electric two-wheelers are gaining traction, achieving a 68% increase in retail sales in April 2026.
- 01Domestic wholesale volumes for two-wheelers rose by 29% year-on-year in April 2026, reaching 1.9 million units.
- 02Retail demand for two-wheelers grew at 13% year-on-year in April 2026, driven by stable rural incomes and lower price hikes.
- 03Electric two-wheelers (e2W) saw a 68% year-on-year retail growth in April 2026, with 154,337 units sold, increasing market penetration to 8%.
- 04ICRA noted that the ongoing conflict in West Asia poses risks to supply chains and could lead to commodity price inflation.
- 05Export volumes for two-wheelers increased by 38% year-on-year in April 2026, continuing the growth trend from FY2026.
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The Indian two-wheeler industry is projected to see a 3-5% growth in wholesale volumes for FY2027, according to a report by ICRA, a credit rating agency. The growth is supported by structural regulatory reforms and healthy replacement cycles, but it faces challenges from a high statistical base and a weak monsoon forecast. The fiscal year began strongly, with a 29% year-on-year increase in domestic wholesale volumes in April 2026, totaling 1.9 million units. Retail demand, while more moderate, grew by 13% in the same month, aided by stable rural incomes and minimal price hikes. The electric two-wheeler segment is thriving, recording a 68% rise in retail sales, with 154,337 units sold, leading to an 8% penetration rate in the overall market. However, ICRA warns of potential risks, including a weak monsoon due to El Niño, domestic input-cost inflation, and supply chain disruptions stemming from geopolitical tensions in West Asia.
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The projected growth in the two-wheeler market may influence manufacturing jobs and rural economies reliant on two-wheeler purchases.
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