India’s commercial vehicle industry is projected to achieve a record volume of approximately 1.24 million units by fiscal 2027, surpassing the previous peak in fiscal 2019, as per a report by Crisil Ratings. Following a robust 13% rebound in fiscal 2026, the industry is expected to experience a growth moderation to 5-6% in FY27 due to the high base.
The domestic demand is anticipated to remain strong, supported by infrastructure-driven activities, consistent replacement demand, and benefits from Good Services Tax (GST) rate reductions. However, exports might face disruptions in the near term due to ongoing events in West Asia, the report highlighted.
Around 92% of the total volume in the commercial vehicle market is driven by the domestic market. The industry is broadly divided into light commercial vehicles (LCVs) and medium and heavy commercial vehicles (MHCVs), with buses forming a sub-segment within each category.
LCVs, constituting approximately 60% of the industry volume, are forecasted to grow by 5-6%, primarily fueled by the demand from e-commerce and last-mile deliveries, according to Anuj Sethi, Senior Director at Crisil Ratings. MHCV volumes are expected to expand by 4-5%, supported by freight movement and infrastructure investments.
The bus segment is likely to witness a growth of 3-4% in fiscal 2027, driven by replacement demand and government initiatives for electric bus procurement. While buses represent a small sub-segment, the electrification in this category is expected to progress rapidly compared to other commercial vehicle categories.
