After a record-breaking year, India's automobile industry is entering 2026 on a relatively strong footing, with sales growth expected in the 6-8 per cent range. The outlook is underpinned by policy support, including GST rationalisation, easing monetary conditions, and income tax relief, which together are likely to improve affordability and sustain consumer demand across vehicle segments. The momentum reflects more than cyclical recovery. Passenger vehicle volumes in 2025 rebounded sharply after a slow start, aided by stronger urban demand, stable rural incomes and improved financing availability. SUVs continued to dominate demand, while CNG and electric vehicles gained traction, indicating a gradual but steady shift in the powertrain mix rather than a disruptive transition. However, 2026 is shaping up as a preparatory year ahead of tighter regulations. The industry faces rising compliance costs as it readies for CAFE norms from 2027 and future emission standards, which could ...