India CV Sales To Hit 12.4 Lakh Units By FY27; Growth To Ease To 5–6%: Crisil Report

New Delhi, Apr 25 (KNN) India’s commercial vehicle (CV) industry is expected to reach a record volume of around 12.4 lakh units in fiscal 2027, surpassing its previous peak in fiscal 2019, according to a report by Crisil Ratings.

The sector witnessed a strong recovery in fiscal 2026 with 13 per cent growth. However, on a higher base, growth is projected to moderate to 5–6 per cent in fiscal 2027.

Domestic Demand to Remain Strong

Domestic demand, which accounts for nearly 92 per cent of total volumes, is expected to remain the key growth driver. Infrastructure activity, replacement demand, and improved affordability following last year’s Goods and Services Tax (GST) rate cut are likely to support demand, the report noted.

The GST reduction from 28 per cent to 18 per cent in September 2025, along with lower interest rates and improved freight utilisation, played a significant role in the recent recovery.

Segment-wise Outlook

The CV industry comprises light commercial vehicles (LCVs) and medium and heavy commercial vehicles (MHCVs), with buses forming a smaller sub-segment.

Crisil Ratings Senior Director Anuj Sethi said, “LCVs, accounting for 60 per cent of the industry volume, are projected to grow 5-6 per cent, driven by e-commerce and last-mile delivery demand, while MHCV volumes are expected to expand 4-5 per cent, supported by freight movement and infrastructure spending.” 

“The ongoing shift toward higher-tonnage vehicles, aided by improved road infrastructure, could moderate volume growth even as underlying demand remains steady,” Sethi added.

Crisil Ratings highlighted that in LCVs, vehicles above 2-tonne GVW now account for 73 per cent (up from 60 per cent in FY20), as operators prioritise payload efficiency. In MHCVs, dedicated freight corridors are creating rail competition for long-haul freight, making any shift in bulk cargo key for replacement demand.

The bus segment is expected to grow 3–4 per cent in FY27, driven by replacement demand and government e-bus procurement, with electrification rising fastest despite low penetration.

Export Growth to Slow

Crisil Ratings Director Poonam Upadhyay noted, “Exports, at ~8 per cent of overall CV volume, may see a sharp deceleration to 2–4 per cent growth in fiscal 2027 from 17 per cent in fiscal 2026.” 

“West Asia, accounting for nearly a quarter of exports, is the key reason, with shipping disruptions deferring dispatches rather than reflecting lost demand. Nevertheless, India’s growing presence as one of the top MHCV producing nations provides a strong base, and finalisation of trade agreements with key economies could help increase export growth over the medium term,” Upadhyay said.

(KNN Bureau)