Indian CV Industry Set for Record FY2026 Sales

The Indian commercial vehicle (CV) industry is poised for a record-breaking performance in FY2026, driven by rising replacement demand and favourable policy changes, industry experts say. According to recent data, sales over April–December 2025 rose 10% year-on-year to 7,54,067 units, with the October–December quarter alone witnessing a 21.5% increase to 2,90,085 units following the Goods and Services Tax (GST) reduction on commercial vehicles from 28% to 18%.

Industry leaders credit the growth to a combination of factors, including a surge in freight activity, continued investment in infrastructure, and the formalisation of the logistics sector. Urban and peri-urban transport has expanded significantly, with e-commerce, organised retail, and quick commerce fueling demand for light and medium commercial vehicles to support last-mile delivery networks.

Shenu Agarwal, MD and CEO of Ashok Leyland, highlighted that around 4.8 million commercial vehicles aged between 10 and 15 years are currently in operation across India. “Of these, approximately 1.9 million are medium and heavy commercial vehicles, while 2.9 million are light commercial vehicles. With replacement demand rising, FY26 and FY27 are shaping up to be the best years for the industry,” he said.

Tata Motors’ MD and CEO, Girish Wagh, echoed the optimism, noting that intermediate, light, and medium commercial vehicles (ILMCVs) have seen the most significant growth, followed by small commercial vehicles and heavy-duty trucks. He added that freight demand has grown by 5–6% in billion tonne-kilometre (BTKM) terms in recent years, reflecting both increased carrying capacity and a shift toward larger multi-axle trucks. With economic growth and rising GDP, the industry expects further gains in volumes.

The structural drivers for growth are clear: infrastructure expansion, industrial production, and logistics modernisation are creating sustained demand for commercial vehicles. Additionally, the average age of India’s CV fleet, currently at 11 years, is prompting replacement purchases, further boosting sales. Government investments in construction and mining sectors, coupled with seasonal upticks in freight during festivals, are also contributing to rising utilisation levels.

According to the National Statistics Office, India’s GDP is projected to expand by 7.4% in 2025–2026, up from 6.5% in FY25. Rising demand across industries such as steel, cement, automotive, and e-commerce is expected to maintain momentum in the CV sector. Analysts predict that the combination of tax rationalisation, replacement demand, and continued infrastructure development will make FY26 one of the most successful years in the history of India’s commercial vehicle market.