MUMBAI, INDIA – OCTOBER 18: On Dhanteras, auspicious day, many people purchased new vehicles at the Car Showroom in Thane, on October 18, 2025 in Mumbai, India.<\/p>\n
Hindustan Times | Hindustan Times | Getty Images<\/p>\n
India’s auto industry posted its strongest month\u00a0on record\u00a0in October, underscoring a sharp rebound in domestic consumption that could offset the impact of the slowdown in exports to the U.S.<\/p>\n
Total retail sales across all vehicle segments \u2014 from cars to tractors \u2014 were up 40.5% from a year earlier, data from the Federation of Automobile Dealers Associations\u00a0showed.<\/p>\n
“Both passenger vehicles and two-wheelers achieved lifetime highs, signaling renewed consumer confidence and strong economic undercurrents,” said C.S. Vigneshwar, President of the trade body, in the release.<\/p>\n
India’s automotive industry contributes 7.1% to the nation’s gross domestic product\u00a0and\u00a0nearly half of manufacturing GDP, according to government data<\/a>. The country is the fourth-largest automobile\u00a0producer globally. Exports to the U.S. account for 2% of India’s GDP.<\/p>\n Japanese carmaker Maruti Suzuki<\/a> India and South Korea’s Hyundai Motor India<\/a> dominate the domestic car sales market, followed by local auto majors like Tata Motors<\/a> and Mahindra\u00a0&\u00a0Mahindra<\/a>.<\/p>\n Passenger vehicle sales grew 11% year on year to 557,000 units in October, while sales of scooters and motorcycles surged 52% to 3.15 million, driven by rural demand, goods and services tax reductions, and the festive rush.<\/p>\n Dealers reported “stronger footfalls and better sentiment leading to extremely high conversion,” FADA noted.<\/p>\n Rural buyers steer recovery<\/p>\n Private and household spending now accounts for more than 60% of India’s GDP in fiscal year 2025 \u2014 a level comparable to developed economies such as the United States and the United Kingdom \u2014 reducing the country’s reliance on exports.<\/p>\n The rebound in domestic demand could help offset<\/a> the negative impact of the steep U.S. tariffs on Indian goods imposed\u00a0since August, analysts say.<\/p>\n