Market Overview
| Study Period | 2017 - 2029 |
|---|---|
| Base Year For Estimation | 2024 |
| Forecast Data Period | 2025 - 2029 |
| Market Size (2025) | USD 51.09 Billion |
| Market Size (2029) | USD 62.95 Billion |
| Growth Rate (2025 - 2029) | 5.36% CAGR |
| Market Concentration | High |
Major Players
*Disclaimer: Major Players sorted in no particular order Image © Mordor Intelligence. Reuse requires attribution under CC BY 4.0. |
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India Commercial Vehicles Market Analysis by Mordor Intelligence
The India Commercial Vehicles Market size is estimated at 51.09 billion USD in 2025, and is expected to reach 62.95 billion USD by 2029, growing at a CAGR of 5.36% during the forecast period (2025-2029).
The Indian commercial vehicle industry is experiencing a transformative phase driven by rapid urbanization and evolving transportation needs. The industry's landscape is being reshaped by stringent emission norms, particularly the BS-VI standards, which have catalyzed technological advancements in vehicle manufacturing. These regulations have prompted manufacturers to invest heavily in research and development, leading to the emergence of more efficient and environmentally conscious vehicle designs. The sector's evolution is further accelerated by the government's push towards sustainable transportation solutions, with several states implementing policies to phase out older commercial vehicles and promote cleaner alternatives.
The commercial vehicle market in India is witnessing significant technological integration across vehicle categories, with manufacturers incorporating advanced telematics and IoT solutions. Major players like Tata Motors and Ashok Leyland are leading this transformation by introducing connected vehicle technologies that enhance fleet management capabilities and operational efficiency. In a notable development from 2023, Tata Motors secured a significant contract to supply 1,400 school buses to the United Arab Emirates, demonstrating the growing international recognition of Indian commercial vehicle manufacturing capabilities. This technological evolution is particularly evident in the urban transportation segment, where smart fleet management systems are becoming increasingly prevalent.
The industry is experiencing a notable shift in manufacturing approaches, with a growing emphasis on modular vehicle platforms and flexible production systems. This transformation is evident in the emergence of new manufacturing facilities equipped with Industry 4.0 capabilities, enabling greater customization and efficiency in commercial vehicle production in India. The sector has also witnessed significant developments in alternative fuel technologies, with manufacturers expanding their portfolio to include CNG, LNG, and electric variants. The introduction of new vehicle models with alternative fuel options has been particularly notable in the last-mile delivery segment, where the demand for sustainable transportation solutions continues to grow.
The commercial vehicle market is increasingly aligning with India's broader economic objectives, particularly in supporting the logistics and infrastructure sectors. The industry's focus has shifted towards developing specialized vehicles for specific applications, from construction and mining to refrigerated transportation and urban mobility. This specialization is reflected in the recent product launches by major manufacturers, who are introducing application-specific variants to meet diverse market needs. The sector has also witnessed increased collaboration between domestic and international players, leading to technology transfer and enhanced product offerings. These partnerships are particularly focused on developing next-generation commercial automobiles that combine global technology with local market requirements.
India Commercial Vehicles Market Trends and Insights
Government initiatives and stringent norms drive rapid growth in the electric vehicle market in India
- India's electric vehicle (EV) market is in a growth phase, with the government actively formulating strategies to combat pollution. The Fame India scheme, launched in 2015, has played a pivotal role in driving vehicle electrification. Building on its success, Fame Phase 2, active till April 2022, further bolstered EV sales, especially in 2021, with the government offering subsidies like INR 10,000 grants for electric cars with battery capacities up to 15 kWh.
- State governments across India are increasingly incorporating electric buses into their fleets, aiming to transition from internal combustion engine (ICE) buses. This move not only cuts operational costs but also curbs carbon emissions and improves air quality. In a notable move, the Delhi government greenlit the procurement of 300 new low-floor electric (AC) buses in March 2021, with 100 of them hitting the roads in January 2022. These initiatives contributed to a significant 62.58% surge in demand for electric commercial vehicles in India in 2022 over 2021.
- The demand for electric cars has surged in recent times, driven by the government's introduction of stringent norms. In August 2021, the Indian government unveiled the Vehicle Scrappage Policy, targeting the phasing out of polluting and unfit vehicles, irrespective of their age. This policy, set to be implemented by 2024, is steering consumers toward electric cars. Additionally, the government has set an ambitious target of having 30% of all cars in India electrified by 2030. These initiatives are poised to propel electric car sales during the 2024-2030 period in India.
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OTHER KEY INDUSTRY TRENDS COVERED IN THE REPORT
- India's population, driven by factors like a young demographic and improved healthcare, is projected to reach 1,522.77 million by 2030, reflecting steady growth
- The consumer spending for vehicle purchases in Asia-Pacific, as exemplified by India, shows signs of cautious optimism during 2022-2023, following a period of volatility
- India's auto interest rates have shown a consistent downward trend, driven by RBI's measures and evolving lending practices
- Electric vehicle sales in India increased because of the falling battery prices and government incentives
- The Indian vehicle market shows resilience with a strong recovery in consumer spending and vehicle purchases
- From 2022 to 2023, Mahindra & Mahindra and Tata Motors led India's commercial vehicles sector, with Isuzu showing significant growth; Force Motors and Eicher Motors face challenges due to recent declines
- India's GDP per capita is expected to sustain growth, reaching USD 4,205.47 by 2030
- India's journey toward lower inflation sets the stage for economic resilience and investor confidence
- India's electric vehicle charging station market surges with 6,800 slow charging and 4,100 fast charging stations in 2022
- Various new entries and new product launches may accelerate the battery pack market in India
- The numerous tax hikes in the country were expected to increase fuel prices in 2023
Segment Analysis: Vehicle Body Type
Light Commercial Pick-up Trucks Segment in India Commercial Vehicles Market
Light Commercial Pick-up Trucks dominate the Indian commercial vehicles market, commanding approximately 57% commercial vehicle market share in 2024. This segment's leadership position is driven by their versatility in handling last-mile delivery requirements, particularly with the surge in e-commerce activities. The segment's strong performance is further bolstered by increasing demands from the logistics sector, SMEs, and rural transportation needs. These vehicles offer an optimal balance of payload capacity and maneuverability, making them particularly suitable for both urban and rural applications. The shift toward electric and CNG variants in this segment, coupled with innovative financing options and competitive total cost of ownership, has further strengthened its market position.
Buses Segment in India Commercial Vehicles Market
The Buses segment is emerging as the fastest-growing category in India's commercial vehicle segment, with a projected growth rate of approximately 8% during 2024-2029. This remarkable growth trajectory is primarily driven by government initiatives to modernize public transportation systems and the increasing demand for electric buses in urban areas. The segment's expansion is further supported by rising requirements from the education sector, corporate employee transportation, and intercity travel operators. Manufacturers are focusing on introducing advanced features, improved fuel efficiency, and electric variants to meet evolving market demands. The implementation of smart city projects and the push for sustainable urban mobility solutions are expected to maintain this growth momentum.
Remaining Segments in Vehicle Body Type
The Heavy-duty Commercial Trucks and Light Commercial Vans segments continue to play crucial roles in shaping the Indian commercial vehicles market. Heavy commercial vehicles serve as the backbone of long-haul transportation and infrastructure development projects, while Light Commercial Vans cater to urban logistics and specialized transportation needs. These segments are witnessing significant technological advancements, particularly in terms of fuel efficiency, safety features, and telematics integration. The transition toward alternative fuel vehicles and the introduction of value-added services are reshaping these segments, while increasing focus on total cost of ownership and operational efficiency continues to drive innovation and market development.
Segment Analysis: Propulsion Type
ICE Segment in India Commercial Vehicles Market
The Internal Combustion Engine (ICE) segment continues to dominate the Indian commercial vehicle segment, commanding approximately 99% market share in 2024. This overwhelming dominance is primarily attributed to the well-established infrastructure supporting conventional fuel vehicles, lower upfront costs compared to alternative powertrains, and the proven reliability of ICE technology in commercial applications. The segment's strength is particularly evident in heavy-duty applications where diesel engines remain the preferred choice due to their superior torque output and fuel efficiency for long-haul transportation. The extensive network of fuel stations, service centers, and spare parts availability across India further reinforces the ICE segment's market leadership, making it the go-to choice for fleet operators and transport companies.
Hybrid & Electric Segment in India Commercial Vehicles Market
The Hybrid & Electric segment in India's commercial vehicles market is experiencing remarkable growth momentum, driven by increasing environmental consciousness and supportive government policies. This segment is witnessing rapid expansion through 2024-2029, supported by significant technological advancements in battery technology and charging infrastructure development. The growth is further catalyzed by the government's push towards electrification through initiatives like FAME II and various state-level incentives for electric commercial vehicles. Major automotive manufacturers are increasingly investing in electric and hybrid technology, introducing new models across various commercial vehicle categories. The segment's growth is particularly notable in urban logistics and public transportation sectors, where the benefits of lower operating costs and reduced emissions are most apparent.
Competitive Landscape
Top Companies in India Commercial Vehicles Market
The commercial vehicles market in India is characterized by intense competition and continuous innovation among major players like Tata Motors, Mahindra & Mahindra, Ashok Leyland, and VE Commercial Vehicles. Companies are increasingly focusing on developing electric and alternative fuel vehicles, with significant investments in R&D for sustainable transportation solutions. Strategic partnerships and collaborations, particularly in the electric vehicle segment, have become a common trend as companies seek to strengthen their market positions. Manufacturers are expanding their product portfolios to include various segments from light commercial vehicles to heavy-duty trucks, while also enhancing their distribution networks across urban and rural markets. The industry has witnessed a strong push towards digitalization and connected vehicle technologies, with companies introducing telematics solutions and smart features in their commercial vehicle offerings. Additionally, players are investing in manufacturing facilities and expanding their service networks to improve customer reach and after-sales support.
Market Dominated by Established Local Players
The Indian commercial vehicle market exhibits a high level of consolidation, with domestic manufacturers holding significant market share in India's commercial vehicle sector through their deep understanding of local market dynamics and extensive dealer networks. These established players have built strong brand equity through decades of presence in the market, supported by robust manufacturing capabilities and well-established supply chains. The market structure favors local conglomerates who have diversified their operations across various automotive segments, allowing them to leverage economies of scale and cross-segment synergies. Foreign players, while present in the market, typically operate through joint ventures or strategic partnerships with local companies to navigate the complex Indian market landscape.
The market has witnessed selective merger and acquisition activities, primarily focused on technology acquisition and market expansion. Companies are increasingly looking at strategic partnerships rather than outright acquisitions, particularly in emerging areas like electric vehicles and connected technologies. The competitive landscape is further shaped by the presence of specialized players in specific segments such as buses or light commercial vehicles, who maintain their market position through focused expertise and niche offerings. The entry barriers remain high due to the capital-intensive nature of the industry and the need for extensive distribution networks, making it challenging for new entrants to establish a significant presence without strategic partnerships.
Innovation and Sustainability Drive Future Success
Success in the Indian commercial vehicles market increasingly depends on companies' ability to innovate and adapt to changing market demands while maintaining cost competitiveness. Manufacturers need to focus on developing fuel-efficient vehicles and alternative powertrains while ensuring their products meet evolving emission norms and safety standards. Building strong dealer networks and after-sales service capabilities remains crucial for both market leaders and challengers, as customer support and maintenance services significantly influence purchase decisions. Companies must also invest in digital capabilities and connected vehicle technologies to meet the growing demand for smart transportation solutions and fleet management systems.
For contenders looking to gain market share, focusing on specific market segments or regional strongholds could provide opportunities for growth. Success factors include developing products tailored to Indian operating conditions and price points, while also investing in localization to maintain cost competitiveness. The regulatory environment, particularly regarding emission norms and safety standards, continues to shape the competitive landscape, requiring manufacturers to maintain significant R&D investments. Companies must also consider the growing influence of sustainability initiatives and government policies promoting electric vehicles, which could reshape market dynamics in the coming years. Building resilient supply chains and maintaining operational flexibility will be crucial for both incumbents and challengers to respond to market changes and maintain competitive advantages.
India Commercial Vehicles Industry Leaders
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Ashok Leyland Limited
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Mahindra & Mahindra Limited
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SML Isuzu Limited
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Tata Motors Limited
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VE Commercial Vehicles Limited
- *Disclaimer: Major Players sorted in no particular order
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Recent Industry Developments
- August 2023: Ve Commercial Vehicles Limited announced that it received an order for 550 Intercity Buses from Vijayan Travels and VT worth INR 5 billion. The order includes 500 Eicher Intercity 13.5m AC and non-AC sleeper coaches and 50 Volvo 9600 luxury sleeper coaches.
- August 2023: Eicher Trucks and Buses, a division of VE Commercial Vehicles Ltd, announced a partnership with Amazon to electrify the middle-mile and last-mile delivery processes for the e-commerce giant in India.
- April 2023: Tata Elxsi signed a Memorandum of Understanding (MoU) with the Indian Institute of Technology, Guwahati (IIT-G), to jointly work on developing and commercializing state-of-the-art solutions for the electric mobility market.
India Commercial Vehicles Market Report Scope
Buses, Heavy-duty Commercial Trucks, Light Commercial Pick-up Trucks, Light Commercial Vans are covered as segments by Vehicle Body Type. Hybrid and Electric Vehicles, ICE are covered as segments by Propulsion Type.
Vehicle Body Type
| Buses |
| Heavy-duty Commercial Trucks |
| Light Commercial Pick-up Trucks |
| Light Commercial Vans |
Propulsion Type
| Hybrid and Electric Vehicles | By Fuel Category | BEV |
| FCEV | ||
| HEV | ||
| PHEV | ||
| ICE | By Fuel Category | CNG |
| Diesel | ||
| Gasoline | ||
| LPG |
| Vehicle Body Type | Buses | ||
| Heavy-duty Commercial Trucks | |||
| Light Commercial Pick-up Trucks | |||
| Light Commercial Vans | |||
| Propulsion Type | Hybrid and Electric Vehicles | By Fuel Category | BEV |
| FCEV | |||
| HEV | |||
| PHEV | |||
| ICE | By Fuel Category | CNG | |
| Diesel | |||
| Gasoline | |||
| LPG | |||
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Market Definition
- Vehicle Type - The category covers light, medium, and heavy duty commercial vehicle.
- Vehicle Body Type - This includes Light Commercial Pick-up Trucks, Light Commercial Vans, Medium-duty Commercial Trucks, Heavy-duty Commercial Trucks, and Medium and Heavy Duty Buses.
- Fuel Category - The category includes various fuel types such as Gasoline, Diesel, LPG (Liquefied Petroleum Gas), CNG (Compressed Natural Gas), HEV (Hybrid Electric Vehicles), PHEV (Plug-in Hybrid Electric Vehicles), BEV (Battery Electric Vehicles), and FCEV (Fuel Cell Electric Vehicles)
| Keyword | Definition |
|---|---|
| Electric Vehicle (EV) | A vehicle which uses one or more electric motors for propulsion. Includes cars, buses, and trucks. This term includes all-electric vehicles or battery electric vehicles and plug-in hybrid electric vehicles. |
| BEV | A BEV relies completely on a battery and a motor for propulsion. The battery in the vehicle must be charged by plugging it into an outlet or public charging station. BEVs do not have an ICE and hence are pollution-free. They have a low cost of operation and reduced engine noise as compared to conventional fuel engines. However, they have a shorter range and higher prices than their equivalent gasoline models. |
| PEV | A plug-in electric vehicle is an electric vehicle that can be externally charged and generally includes all-electric vehicles as well as plug-in hybrids. |
| Plug-in Hybrid EV | A vehicle that can be powered either by an ICE or an electric motor. In contrast to normal hybrid EVs, they can be charged externally. |
| Internal combustion engine | An engine in which the burning of fuels occurs in a confined space called a combustion chamber. Usually run with gasoline/petrol or diesel. |
| Hybrid EV | A vehicle powered by an ICE in combination with one or more electric motors that use energy stored in batteries. These are continually recharged with power from the ICE and regenerative braking. |
| Commercial Vehicles | Commercial vehicles are motorized road vehicles designed for transporting people or goods. The category includes light commercial vehicles (LCVs) and medium and heavy-duty vehicles (M&HCV). |
| Passenger Vehicles | Passenger cars are electric motor– or engine-driven vehicles with at least four wheels. These vehicles are used for the transport of passengers and comprise no more than eight seats in addition to the driver’s seat. |
| Light Commercial Vehicles | Commercial vehicles that weigh less than 6,000 lb (Class 1) and in the range of 6,001–10,000 lb (Class 2) are covered under this category. |
| M&HDT | Commercial vehicles that weigh in the range of 10,001–14,000 lb (Class 3), 14,001–16,000 lb (Class 4), 16,001–19,500 lb (Class 5), 19,501–26,000 lb (Class 6), 26,001–33,000 lb (Class 7) and above 33,001 lb (Class 8) are covered under this category. |
| Bus | A mode of transportation that typically refers to a large vehicle designed to carry passengers over long distances. This includes transit bus, school bus, shuttle bus, and trolleybuses. |
| Diesel | It includes vehicles that use diesel as their primary fuel. A diesel engine vehicle have a compression-ignited injection system rather than the spark-ignited system used by most gasoline vehicles. In such vehicles, fuel is injected into the combustion chamber and ignited by the high temperature achieved when gas is greatly compressed. |
| Gasoline | It includes vehicles that use gas/petrol as their primary fuel. A gasoline car typically uses a spark-ignited internal combustion engine. In such vehicles, fuel is injected into either the intake manifold or the combustion chamber, where it is combined with air, and the air/fuel mixture is ignited by the spark from a spark plug. |
| LPG | It includes vehicles that use LPG as their primary fuel. Both dedicated and bi-fuel LPG vehicles are considered under the scope of the study. |
| CNG | It includes vehicles that use CNG as their primary fuel. These are vehicles that operate like gasoline-powered vehicles with spark-ignited internal combustion engines. |
| HEV | All the electric vehicles that use batteries and an internal combustion engine (ICE) as their primary source for propulsion are considered under this category. HEVs generally use a diesel-electric powertrain and are also known as hybrid diesel-electric vehicles. An HEV converts the vehicle momentum (kinetic energy) into electricity that recharges the battery when the vehicle slows down or stops. The battery of HEV cannot be charged using plug-in devices. |
| PHEV | PHEVs are powered by a battery as well as an ICE. The battery can be charged through either regenerative breaking using the ICE or by plugging into some external charging source. PHEVs have a better range than BEVs but are comparatively less eco-friendly. |
| Hatchback | These are compact-sized cars with a hatch-type door provided at the rear end. |
| Sedan | These are usually two- or four-door passenger cars, with a separate area provided at the rear end for luggage. |
| SUV | Popularly known as SUVs, these cars come with four-wheel drive, and usually have high ground clearance. These cars can also be used as off-road vehicles. |
| MPV | These are multi-purpose vehicles (also called minivans) designed to carry a larger number of passengers. They carry between five and seven people and have room for luggage too. They are usually taller than the average family saloon car, to provide greater headroom and ease of access, and they are usually front-wheel drive. |
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Research Methodology
Mordor Intelligence follows a four-step methodology in all its reports.
- Step-1: Identify Key Variables: To build a robust forecasting methodology, the variables and factors identified in Step-1 are tested against available historical market numbers. Through an iterative process, the variables required for market forecast are set and the model is built based on these variables.
- Step-2: Build a Market Model: Market-size estimations for the historical and forecast years have been provided in revenue and volume terms. Market revenue is calculated by multiplying the sales volume with their respective average selling price (ASP). While estimating ASP factors like average inflation, market demand shift, manufacturing cost, technological advancement, and varying consumer preference, among others have been taken into account.
- Step-3: Validate and Finalize: In this important step, all market numbers, variables, and analyst calls are validated through an extensive network of primary research experts from the market studied. The respondents are selected across levels and functions to generate a holistic picture of the market studied.
- Step-4: Research Outputs: Syndicated Reports, Custom Consulting Assignments, Databases & Subscription Platforms.
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