India's two-wheeler export sector has demonstrated remarkable recovery momentum in recent years, with export revenues growing at a 9% CAGR during FY2018-27 and 18% during FY2024-27, according to a Kotak Institutional Equities report. Export volumes rose at a 21.5% CAGR over FY2024-27, indicating robust demand across international markets. The strong performance reflects successful market expansion and improved manufacturing capabilities in the Indian two-wheeler industry. Recent data shows this momentum continuing with two-wheeler exports rising 28.5% to 555,292 units in August 2026, while domestic dispatches increased 10.5% to 2.03 million units, as reported by SIAM. Kotak expects FY2027E export trend to remain strong, driven by multiple geographies, though momentum could moderate sharply from FY2028 as pent-up replacement demand fades and the higher base takes effect.
The government has significantly stepped up measures to ease business for exporters, with approvals for market access initiatives rising sharply and nearly 24,000 registrations recorded under the Interest Subvention Scheme, according to official data as of September 14, 2026. The Interest Subvention Scheme for pre- and post-shipment export credit has recorded 23,924 registrations from 9,249 distinct Importer-Exporter Code (IEC) holders, allowing exporters to use a single registration to avail interest subvention and collateral support for export credit. Under the Market Access Support Intervention, 339 events have been approved for the fourth quarter of FY 2025-26 and the first quarter of FY 2026-27, compared with 244 events approved during the entire FY 2024-25. Europe accounted for the largest share at 27% of the approved events, while South Asia and ASEAN accounted for around 9% each. Separately, 98 proposals have been approved under the Rupee-Based Settlement Mechanism (RBSM) for market access support, with Germany leading at 85 approved applications, followed by the United States with 70 and Italy with 62.
Kotak attributed the recent growth to strong demand in the Americas, particularly Colombia, Peru and Brazil, a recovery in African markets as currency availability improved, and the reopening of the Sri Lankan market along with stronger demand in Nepal. However, Argentina was an exception with exports facing multiple headwinds. Latin American demand has increasingly shifted towards motorcycles as income-generating assets, with delivery, courier and motorcycle taxi activity supporting purchases, though the report expects growth in the region to moderate to mid-single digits as the benefit from lower interest rates, deferred replacement demand and rapid expansion of delivery-related demand fades. The latest data shows utility vehicle exports bucking the trend with a 23.7% increase to 46,400 units in August, while passenger car exports fell 51.5% to 21,181 units, indicating selective demand patterns across different vehicle segments.
India's passenger vehicle domestic market experienced unprecedented growth in August 2026, with dispatches surging 36.5% to a record 439,309 units as automakers prepared for the festive season, according to SIAM data. UV dispatches jumped 39.2% to 250,084 units while passenger car dispatches increased 23.8% to 112,011 units, excluding Tata Motors and luxury manufacturers. PV production increased 25.7% to 454,266 units from 361,489 units in the previous year. Industry experts attribute this strong performance to favourable base effects, healthy underlying demand, strong consumer confidence, resilient rural markets and improving financing conditions, as noted by SIAM's Rajesh Menon. The festive season is expected to provide additional boost to domestic demand.
