India's Auto Industry Set For Growth With EV Push And Job Surge, Says Report. Check Details

Cities like Mumbai, Hyderabad, and Pune are projected to thrive, while around 7.5 per cent of cities may face stagnant growth

India's automotive sector is projected to experience positive growth in the upcoming year, fueled by favourable government policies and a strengthening job market, according to a report released on Saturday. The key driver behind this growth is the ongoing impact of the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME II) scheme, which has been in place since April 2019.

This policy encourages states to provide both financial and non-financial incentives to accelerate the adoption of electric vehicles (EVs), further boosting the growth of the sector. According to a report by data analytics firm GlobalData, approximately 24.7 per cent of cities are expected to experience strong growth in the automotive sector, while 49.5 per cent are anticipated to see moderate growth.

Cities like Mumbai, Hyderabad, and Pune are projected to thrive, while around 7.5 per cent of cities may face stagnant growth. Additionally, 9.7 per cent and 15.5 per cent of cities are expected to witness moderate and pessimistic declines, respectively. Chandigarh, in particular, is among the cities facing challenges in automotive sector expansion.

Job Creation

Hyderabad and Mumbai are well-positioned for growth, thanks to their expanding service sectors and job opportunities. Hyderabad, in particular, has seen a significant rise in employment, driven by government initiatives that support start-ups and entrepreneurship. The state's focus on information technology (IT) and IT-enabled services (ITES) has been key to job creation. Moreover, ongoing improvements in infrastructure—such as roads, transportation, and power supply—have made the city increasingly attractive for both businesses and workers.

A survey across 31 major cities found that the growing workforce has, in turn, fueled demand in the automotive sector.

"While the overall growth of the automotive sector is promising, regional dynamics greatly influence the trajectory of the market," Madhuchhanda Palit, Automotive Analyst at GlobalData, said.

Palit further stressed that factors like advancements in the service sector, availability of job opportunities, industrialisation, and state government initiatives are key drivers influencing the growth of the sector in various regions.