India experienced a significant surge in electric vehicle (EV) demand during March 2026, with sales increasing by 20-25%. Shailesh Chandra, President of the Society of Indian Automobile Manufacturers (SIAM) and Managing Director & CEO of Tata Motors Passenger Vehicles, attributed this sharp rise to consumer concerns over potential fuel price increases stemming from the ongoing West Asia conflict.
"I can clearly see in passenger vehicles, there was a sharp rise in demand in March," Chandra stated, highlighting the immediate impact of global events on local markets. He noted that while India had not yet seen direct fuel price hikes, the apprehension among consumers, influenced by situations in Europe, was a key driver for the shift towards EVs.
Indian Auto Sector Sees Record Sales Amid EV Growth
The broader Indian passenger vehicle industry achieved record sales in the financial year 2025-26, clocking 4.64 million units and posting a robust growth of 7.9% compared to the previous fiscal year. March 2026 alone saw car sales jump by 16% year-on-year, reaching 442,000 units.
This strong performance was supported by several favorable economic factors. SIAM noted improved affordability due to GST rate reductions, enhanced purchasing power from personal income tax relief, and lower financing costs following successive repo rate cuts by the Reserve Bank of India (RBI). The second half of FY25-26 showed particularly strong growth at 16.7%, contrasting with a 1.4% de-growth in the first half.
Electric Car Registrations Soar
Within this expanding market, electric car registrations witnessed an impressive growth of over 83% in FY26 compared to previous years, underscoring the accelerating adoption of EVs in India.
Despite the positive sales figures, the automobile industry association expressed ongoing concerns. Uncertainties arising from the West Asia conflict, particularly regarding crude oil and commodity prices, higher exchange rates, and disruptions in global shipping routes, continue to pose challenges for the auto sector's stability and future outlook.