India's two-wheeler sector may clock 5 pc growth in FY27: Report
New Delhi, May 20
India's two-wheeler industry expected to witness wholesale volume growth of up to 5 per cent year-on-year in FY2027, supported by GST rationalisation and improving replacement demand, according to a report released on Wednesday.
A report by ICRA has highlighted that domestic two-wheeler wholesale volumes recorded a sharp increase of 29.2 per cent year-on-year in April 2026 to reach 1.9 million units due to improved affordability following the implementation of GST 2.0 reforms.
However, it cautioned that growth momentum may moderate in the coming months due to a high base effect, weak El Niño-led monsoon forecasts, fuel-driven price hikes and rising input costs.
The report showed that retail demand also remained healthy during the month, with volumes rising 13 per cent year-on-year, supported by lower-than-expected price hikes, sustained rural cash flows due to strong agricultural output and the extended wedding season till mid-May.
Moreover, the electric two-wheeler (e2W) segment continued to gain momentum as retail sales in the two-wheeler segment stood at 1,54,337 units in April 2026, a strong 68.1 per cent year-on-year growth.
For FY2026, e2W volumes expanded by about 22 per cent, while penetration within the overall two-wheeler market reached 8.1 per cent in April 2026.
The segment's steady growth reflects increasing consumer acceptance, aided by expanding product availability and improving cost competitiveness, according to the report.
In addition, exports remained a key growth driver for the industry, with monthly export volumes increasing 38.3 per cent year-on-year in April despite headwinds in certain overseas markets.
For FY2026, overall two-wheeler exports grew 23.3 per cent, supported by expanding product portfolios and rising global recognition of Indian two-wheeler brands.
However, the report flagged that geopolitical uncertainties, especially ongoing tensions in West Asia, could continue to pose risks to supply chains and export performance.
— IANS
Reader Comments
The wedding season boost makes sense—so many weddings this year, and everyone needs new vehicles for the festivities! 😄 But the El Niño monsoon warning is worrying. If rural incomes take a hit, two-wheeler demand could slump. Government should focus on supporting farmers to sustain this momentum.
Impressive export growth of 38%! Indian two-wheelers are becoming a force globally. But I worry about the West Asia tensions affecting supply chains. The industry needs to diversify export markets to reduce risk. Also, GST rationalisation is helping, but input costs are still a challenge for manufacturers.
Good to see the two-wheeler industry doing well, but let's not ignore that the high base effect will slow things down. The real test is whether demand sustains after the wedding season ends. Also, we need more charging infrastructure for e2Ws to truly take off—8.1% penetration is a good start but still low.
The GST 2.0 reforms seem to be working! Affordability is key for the Indian market. But I'm concerned about fuel price hikes eating into household budgets. The government should consider further tax breaks for EVs to accelerate adoption. Rural cash flows from agriculture are helping, but that's seasonal.
Respectfully, the report is a bit too optimistic. Yes, numbers look good now, but rising input costs and weak monsoon could derail growth. We've seen this pattern before—a few good months followed by a slump. The industry needs to be cautious and not overproduce. Better to have consistent, sustainable growth.
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