India CV industry jumps 27% (YoY) in January; GST cut drives volume surge: ICRA
Feb 24, 2026
New Delhi [India], February 24 : The Indian commercial vehicle (CV) industry continued to report robust year-on-year (YoY) volume growth in January 2026, with domestic wholesale volumes rising 27 per cent to 99,544 units.
As per ICRA, this performance also reflected a "sequential growth of 1.9 per cent over the 97,682 units recorded in December 2025." The surge in volumes was primarily driven by the reduction in the Goods and Services Tax (GST) rate from 28 per cent to 18 per cent, which became effective on September 22, 2025, and was further supported by increased freight activity in the goods segment.
Retail volumes in the medium and heavy commercial vehicle (M&HCV) segment witnessed a healthy growth of 15.4 per cent on a YoY basis in January 2026, while recording a sequential growth of 22.1 per cent.
According to ICRA, "The retail volume growth in the M&HCV segment during 10M FY2026 stood at 6.3%, indicating improving volume momentum following the implementation of GST rate cuts". Despite this momentum, ICRA noted that with the gradual subsiding of the GST rate cut-induced demand push, "some moderation in the M&HCV segment's volume growth momentum is expected in the remaining months of FY2026".
The light commercial vehicle (LCV) segment recorded a 14.9 per cent YoY growth in retail volumes in January 2026, supported by a strong sequential growth of 33 per cent. ICRA observed that "The LCV segment, being a cost-sensitive segment, demonstrated a faster uptick in demand compared to the M&HCV segment following the GST rate reduction".
However, the segment continues to face hurdles as the report noted that "the high cost of funding continues to remain one of the key challenges for demand in this segment".
For the first ten months of the 2026 fiscal year, domestic CV wholesale volumes grew by 11.3 per cent YoY, while retail volumes registered an 8.5 per cent growth during the same period. Looking ahead, ICRA expects the domestic CV industry to register a moderate YoY growth of 7-9 per cent in wholesale volumes for the full fiscal year 2026.
Specifically, M&HCV trucks and LCV trucks are expected to see volume growth of 7-9 per cent and 9-11 per cent, respectively, while the buses segment is likely to see an 8-10 per cent growth. Domestic wholesale volumes are further projected to register a moderate year-on-year growth of 4-6 per cent in the 2027 fiscal year.
