The car industry in India is the world's fourth largest. India was the world's fourth largest manufacturer of cars and seventh largest manufacturer of commercial vehicles in 2019. Indian automotive industry (including part-related manufacturing) is expected to reach Rs 16.16-18.18 trillion (US$_$ 251.4-282.8 billion) by 2026. The industry attracted Foreign Direct Investment (FDI) worth US$_$ 24.21 billion during April 2000 to March 2020 according to the data released by Department for Promotion of Industry and Internal Trade (DPIIT).

Domestic car production increased at 2.36 per cent CAGR between FY16-FY20 with 26.36 million vehicles being manufactured in the country in FY20. Overall, domestic cars sales increased at 1.29 per cent CAGR between FY16-FY20 with 21.55 million vehicles being sold in FY20.

Two wheelers and passenger vehicles rule the domestic Indian auto market. Passenger car sales are ruled-over by small and mid-sized cars. Two wheelers and passenger cars accounted for 80.8 per cent and 12.9 per cent (out of all the people who buy a product (like a car), how many people buy it from a particular company), (match up each pair of items in order), accounting for a combined sale of over 20.1 million vehicles in FY20.

Overall, car export reached 4.77 million vehicles in FY20, growing at a CAGR of 6.94 per cent during FY16-FY20. Two wheelers made up 73.9 per cent of the vehicles exported, followed by passenger vehicles at 14.2 per cent, three wheelers at 10.5 per cent and commercial vehicles at 1.3 per cent.

The electric vehicle (EV) market is estimated to be a Rs 50,000 crore (US$ 7.09 billion) opportunity in India by 2025.