From a tentative, low-cost production centre, India has emerged as a reliable manufacturing destination for automobiles as global brands use their local production to cater to increasingly sophisticated customers abroad.
05 Jan 2026 | 663 Views | By Prerna Lidhoo & Ketan Thakkar
Not very long ago, Indian factories were viewed largely as frugal and low-cost assembly lines but rarely trusted with scale and consistency on the global stage. India's export footprint was limited, focused largely on two-wheelers for African markets and small cars for a narrow set of emerging economies, with the ...
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Not very long ago, Indian factories were viewed largely as frugal and low-cost assembly lines but rarely trusted with scale and consistency on the global stage. India's export footprint was limited, focused largely on two-wheelers for African markets and small cars for a narrow set of emerging economies, with the components segment doing the heavy lifting instead of fully-built vehicles. This perception has been changing steadily over the past decade, with 2025 being the year India finally broke out for good.
This year, the country is on track to ship over five million vehicles to overseas markets, a milestone that places it in an exceptionally small global club. Today, only a handful of countries export at this scale–China, the world's largest auto exporter; Japan and Germany, long-established manufacturing powerhouses; South Korea, home to globally competitive OEMs, and Mexico, a critical production hub for North America. Crossing the five-million-unit threshold is a mark of manufacturing maturity, supply-chain depth and global trust.
As a result, exports have emerged as a structural growth engine. According to SIAM (Society of Indian Automobile Manufacturers), the January–November data underscores a decisive divergence between export and domestic growth trajectories. Total vehicle exports rose around 29% year-on-year, climbing from about 3.73 million units to 4.8 million units, while domestic sales grew just 4–5% over the same period. This gap highlights how exports, not local demand, are currently doing the heavy lifting for industry growth.
Two-Wheelers
Two-wheeler exports climbed from 26.87 lakh units to 33.33 lakh units, a 24% year-on-year increase, reinforcing the segment's role as the backbone of India's vehicle export engine. In H1FY26 Bajaj Auto exported 10.2 lakh units as compared to 8.5 lakh in the same period, registering a growth of 20%, retaining its position as India's largest two-wheeler exporter.
TVS Motor delivered one of the strongest performances in the segment, with exports rising 34% to 7.52 lakh units in H1FY26, driven by deeper penetration across Africa and Latin America. In April–October 2025, Honda Motorcycle & Scooter India exported 3,63,161 units, while Hero MotoCorp exported 240,946 units in April -Nov 2025.
Taken together, the data points to two clear trends: export growth is being driven both by incumbent scale players consolidating leadership in their markets and by expansion into new geographies, steadily reducing overdependence on any single market.
"The 2W industry is projected to achieve export volumes of 4.9–5.0 million units in CY2025, compared to 4.0 million units in CY2024, supported by recovering demand in key markets, particularly Latin America,” said Rohan Kanwar Gupta, Vice President & Sector Head, Corporate Ratings, ICRA Ltd. “Indian OEMs continue to expand into new geographies such as West Asia and Europe, leveraging innovative designs, market-specific products, strong distribution networks, and robust after-sales service."
He adds that over the medium term, export prospects remain strong, driven by economic growth, rising per capita income, low penetration levels, and increasing use of 2Ws in commercial fleets. "However, in the near term, export volumes may face pressure due to Mexico's imposition of tariffs, which impacts roughly 12–15% of India's 2W exports. To mitigate this, OEMs are pursuing strategies such as local partnerships, cost optimization, lobbying for phased tariff relief under potential trade agreements, and targeting alternative growth markets within the region," he said.
According to exports market leader Bajaj Auto, sales to overseas markets have bounced back strongly and could soon hit their pre-COVID peak of 200,000 units per month. With markets such as Latin America (LATAM) showing solid growth and Nigeria remaining the only weak spot, Bajaj is well-positioned to regain lost ground globally.
This export-led momentum is also reflected in Bajaj Auto's 23.7% rise in second-quarter profit. While overall two-wheeler exports from India jumped 25% in the quarter, Bajaj's own exports rose 19.2%. The company registered its highest motorcycle sales in Latin America, where models like the Pulsar and Dominar continue to enjoy strong demand.
Bajaj Auto remains the clear export leader, shipping 1.91 lakh units, up from 1.21 lakh units last year, a growth of nearly 59%. TVS Motor also delivered strong momentum, exporting 1 lakh units, up 41% YoY. Together, Bajaj Auto and TVS account for virtually the entire three-wheeler export market, underlining their dominance in this segment across Africa, South Asia and parts of Latin America.
Passenger Vehicles
Passenger vehicle exports climbed from 4.99 lakh units to 5.99 lakh units, marking a around 20% year-on-year increase in the January-November period, reinforcing the point that India's PV export story is no longer confined to niche markets or a narrow set of models.
Maruti Suzuki continues to anchor the segment, with combined exports of 2,05,763 units in April–September FY26, up 40 % from 1,47,063 units in the year-ago period (H1 FY25). Notably, SUVs now form a steadily increasing share of the company's export portfolio.
The Company sold a total of 1,078,735 units during the period, comprising domestic sales of 871,276 units and all-time high half-yearly exports of 207,459 units. In H1 FY 2025-26, the Company’s total volume grew by 1.4% over the same period last year, primarily driven by a robust increase in exports.
Maruti Suzuki contributes over 47% of all passenger vehicles exported from India, including cars, UVs and vans. Currently, Maruti Suzuki and Hyundai dominate passenger car exports, together accounting for about 81% of total car shipments in the current fiscal.
The company exports to nearly 100 countries, with Africa, Latin America, Asia and the Middle East as key markets, and currently ships 18 models, with the Fronx being the latest addition to its export portfolio.
Maruti’s total utility vehicle exports are nearly equal to the combined shipments of other manufacturers in the segment. While Maruti’s exports of hatchbacks and sedans fell, utility vehicles emerged as the dominant growth driver for the company. Industry body SIAM attributed the industry’s export growth to stable demand across key global markets, particularly in the Middle East and Latin America. “Indian automakers registered positive growth in 24 countries during the first half of FY26, reflecting a broad-based expansion in export destinations,” it said.
Maruti Suzuki plans to expand exports to over 100 countries, introduce more models across markets, and strengthen distribution through improved dealer finance, service infrastructure and parts availability.
“In the first half (April-September), we have done over 2.07 lakh units. So, we are on track to achieve the 4 lakh unit forecast (for FY26)," said Rahul Bharti, Senior Executive Officer – Corporate Affairs at Maruti Suzuki. He added that exports are more than double of those of the nearest domestic competitor.
“What is also very interesting is the absolute growth. I recall that about four years ago, we used to do about one lakh unit exports in a year. This time, just in the second quarter, we've done over 1 lakh units,” he said. In the first half of FY26, the company's sub-4 metre models, Fronx, Jimny, Swift, Baleno and Dzire were the most imported models. South Africa, Japan, Saudi Arabia, Chile and Colombia were the best export markets for the automaker during this period.
Hyundai Motor India is India's second-largest exporter that plans to make the country a global export hub 30% local output for overseas market by 2030. Tarun Garg, Whole-time Director and Chief Operating Officer, Hyundai Motor India Ltd, said exports have been integral to the company’s growth model: “Today, India is our largest export hub outside Korea, catering to several emerging markets."
Currently, around 21% of Hyundai's production is exported to regions such as Africa, the Middle East and Latin America. With the commissioning of its Talegaon manufacturing facility, the company's export strategy is supported by high localisation levels of around 81%, with plans to raise this to nearly 90% to improve cost competitiveness and supply chain resilience. For FY26, Hyundai expects exports to grow by 7–8%, supported by demand from emerging markets, said Unsoo Kim, MD & CEO of Hyundai Motor India. The company exported 170,242 units from Jan to Nov 2025.
Hyundai has also outlined an aggressive product roadmap, committing to 26 launches by FY2030, including 20 ICE models and 6 EVs, alongside a Rs 7,000 crore capex plan for FY26, with a major focus on manufacturing expansion in Pune.
During the same period, Nissan Motor India exported 71,236 units, supported by sustained overseas demand for models such as the Magnite and Sunny and also announced the export of its 1.2 millionth vehicle from the country in October.
The Japanese automaker has primarily focused on a single car model, the Magnite, while occasionally offering fully-imported models like the X-Trail. The brand exports cars from India to the AMIEO (Africa, Middle East, India, Europe and Other) region. Volkswagen India, too, extended its export-led resurgence with shipments of 40,193 units, driven by strong demand for the Virtus and Taigun.
Unlike two- and three-wheelers, passenger vehicle export growth is becoming increasingly broad-based, with multiple OEMs scaling up volumes and leveraging India not just as a low-cost manufacturing base, but as a regional and, in some cases, global export hub. SIAM attributed the export growth to consistent demand across major international markets, particularly the Middle East and Latin America, noting that Indian automakers registered export growth in 24 countries, including Korea, the UAE, Germany, Mexico and Brazil.
Gupta, of ICRA, says the PV industry is likely to record export volumes of 8.5–9.0 lakh units in CY2025, up from 7.4 lakh in CY2024, aided by improving demand in key markets like Latin America and Africa. Over the medium term, export prospects remain favorable, supported by economic growth and rising per capita income, he said.
Mexico is a major destination for India's compact and mid-size car exports. However, with Mexico's revised tariffs on PV imports from India set to increase from 20% to 35–50% (depending on category) in January 2026, India's cost advantage is likely to erode significantly, he pointed out.
This could lead to moderation in export volumes and margins, particularly for OEMs heavily dependent on Mexico. "Key monitorables include ongoing trade negotiations for preferential agreements and OEM strategies such as local assembly or diversification into other Latin American markets," he adds.
Scale, EVs and New Risks
Future export growth will be driven by portfolio expansion, incremental capacity additions, deeper geographic penetration and the inclusion of EVs in export line-ups. OEMs such as Hyundai and Maruti Suzuki have laid out ambitious long-term export targets, while Tata Motors is sharpening its focus on overseas markets. New entrants like VinFast are also developing India as an export hub, and a potential re-entry of Ford, initially through powertrain exports, could further strengthen India's manufacturing ecosystem.
Crucially, ongoing and prospective free trade agreement (FTA) negotiations are expected to provide an additional tailwind. Market access under FTAs could lower tariff barriers, improve competitiveness for Indian-made vehicles and components, and accelerate entry into both emerging and mature markets, particularly in regions where price sensitivity and duty structures play a decisive role in sourcing decisions.
That said, risks remain. Rising tariffs in Mexico, geopolitical uncertainties and the outcomes of ongoing trade negotiations will be key monitorables. Mexico alone accounts for 12–15% of India's two-wheeler exports and is also a significant destination for compact cars, making policy shifts there especially consequential for Indian OEMs.
Hemal Thakkar, Senior Practice Leader and Director, CRISIL Market Intelligence & Analytics says his outlook for the industry remains optimistic, with exports expected to grow 17–20% year-on-year in CY2025, translating into total volumes of 8.5–9.0 lakh units. This momentum is likely to continue into CY2026, with exports projected to rise 10–14% year-on-year, taking volumes to 9.5–10.0 lakh units, he notes. He highlights the ambitious long-term export targets set by major manufacturers including Maruti Suzuki and Hyundai, along with an increased focus on exports by Tata Motors.
Experts point out that Indian OEMs are no longer exporting only basic, low-margin products. Over the past five years, export portfolios have broadened to include SUVs, MPVs, premium motorcycles, higher-displacement two-wheelers and, increasingly, EVs, marking a clear shift up the value curve.
Passenger vehicle exports are now being led by compact and mid-size SUVs such as the Maruti Grand Vitara, Fronx and Brezza, Hyundai Creta and Venue, Nissan Magnite and Volkswagen Taigun, while two-wheeler shipments increasingly feature premium models like the Bajaj Dominar and Pulsar, KTM derivatives and TVS Apache. This richer product mix has lifted average realisations and margins, turning exports into a more sustainable growth lever rather than a volume-only play.
This evolution on the export front is unfolding alongside a parallel and equally important story at home. Even as OEMs sharpen their export portfolios and push up the value curve overseas, domestic production has remained resilient, providing the scale, stability and confidence that underpin India's growing global ambitions. It is this strong domestic foundation, experts argue, that has allowed manufacturers to absorb external shocks while continuing to invest in capacity, technology and product development.
According to Gaurav Vangaal, Associate Director at S&P Global Mobility, despite encountering several challenges this year, including geopolitical tensions that led to the US imposing tariffs of up to 50% on India and a military dispute with Pakistan in May, India has successfully navigated these obstacles. Additionally, China's ban on rare earth metals has created further difficulties. However, timely GST reforms have allowed the Indian car market to sustain a record-breaking production trajectory since 2022.
He believes India’s domestic market will remain robust with the help of lower interest rates and crude oil prices and increasing competition. Meanwhile, the industry is closely monitoring the final guidelines from the Government of India regarding the CAFE 3 norms. “Based on our projections, India is on track to achieve another year of substantial production growth, with an anticipated increase of 7.4% in light vehicle production, reaching 6.42 million units, making it the fastest growing among major economies worldwide," he added.