India's auto sales rose 7.7% in 2025, boosted by GST 2.0 and strong rural demand, with EVs gaining traction.

India’s auto retail sales rose 7.7% in 2025 to 28.16 million units, driven by a strong second-half recovery following the rollout of GST 2.0, which lowered taxes on mass-market vehicles. Passenger vehicle sales jumped 9.7% to 4.47 million units, with rural demand growing 12.3% compared to 8.1% in urban areas. December 2025 saw a 14.6% year-on-year sales surge to 2.03 million units, led by passenger vehicles (up 26.6%) and three-wheelers (up 36.1%). Electric vehicle adoption grew, making up nearly 4% of passenger vehicles and over 60% of three-wheeler sales, while CNG accounted for 21.3% of passenger vehicles. Inventory levels eased to 37–39 days, and dealer sentiment remained positive, with over 70% expecting January 2026 growth.