Strong Start for India’s CV Industry in January 2026: The commercial vehicle (CV) industry of India continued to register strong year-on-year (YoY) growth in January 2026. According to ICRA report, the domestic wholesale volume rose 27 per cent to 99,544 units. This performance also reflected a “sequential growth of 1.9 per cent over the 97,682 units recorded in December 2025.”
GST Rate Cut Drives Volume Growth
The first and foremost reason for this jump in volumes was the reduction in the Goods and Services Tax (GST) rate from 28 per cent to 18 per cent, which came into effect from September 22, 2025. This was further boosted by increased freight activity in the freight sector.
M&HCV Segment Sees Healthy Retail Growth
In January 2026, retail sales volumes in the medium and heavy commercial vehicle (M&HCV) segment witnessed a healthy growth of 15.4 per cent year-on-year. At the same time, sequentially it registered an increase 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”.
LCV Segment Outpaces with Faster Demand Uptick
Retail sales volumes in the light commercial vehicle (LCV) segment registered a growth of 14.9 per cent year-on-year 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”.
Key Challenges: High Cost of Funding
However, the sector still faces several hurdles, with the report noting that “high cost of funding continues to remain one of the key challenges for demand in this segment”.
Performance During 10M FY2026
During the first ten months of FY2026, domestic CV wholesale volume grew by 11.3 per cent year-on-year, while retail sales volume registered an 8.5 per cent growth during the same period.
FY2026 Outlook: Moderate Growth Expected
Going forward, ICRA expects the domestic CV industry to register a moderate annual growth of 7-9 per cent in wholesale volumes for the full year of FY2026.
Specifically, sales of M&HCV trucks and LCV trucks are expected to grow by 7-9 per cent and 9-11 per cent, respectively, while the bus segment is likely to grow by 8-10 per cent. Domestic wholesale volumes are projected to register a modest growth of 4-6 per cent year-on-year in FY27.
