India’s electric vehicle (EV) market is accelerating, with electric car sales rising 75 percent year-on-year in 2025 to reach 165,000 units, according to the International Energy Agency (IEA). Electric cars accounted for nearly 4 percent of total car sales in India during 2025, signaling stronger consumer adoption despite the market still trailing leading EV nations in Asia.
The latest edition of the IEA’s Global EV Outlook 2026 shows that India is gradually emerging as a significant EV market, supported by domestic manufacturing, expanding model availability, and government-backed incentives.
A major highlight for India’s EV industry is the strong role of local automakers. Around 60 percent of electric car sales in India in 2025 came from vehicles produced domestically by Tata Motors and Mahindra. Mahindra recorded a fivefold increase in EV sales after launching two new electric models during the year.
India also witnessed rapid expansion in EV model availability. The number of electric car models available in the country increased from 33 in 2024 to 45 in 2025, giving consumers more choices across multiple price segments.
The report noted that India remains the second-largest car market in the Asia Pacific region, but EV penetration is still below levels seen in countries such as Viet Nam and Thailand. However, the growth momentum in 2025 indicates that India’s EV ecosystem is beginning to scale more rapidly.
Government policy is expected to play a critical role in the next phase of EV growth. India finalized the Scheme to Promote Manufacturing of Electric Passenger Cars in India (SPMEPCI) in June 2025. Under the policy, selected automakers can import completely built-up electric vehicles priced above $35,000 at a reduced import duty of 15 percent, compared with duties of up to 110 percent for non-eligible imports. The scheme will remain valid for five years.
Several global automakers expressed interest in participating in the scheme, though some delayed final investment decisions because of uncertainties linked to India-European Union trade negotiations and restrictions on rare-earth magnet exports from China.
India is also seeing stronger growth in electric two- and three-wheelers. The IEA report said sales of electric two- and three-wheelers in Southeast Asia more than doubled in the first quarter of 2026, while India recorded growth of more than 30 percent.
Globally, EV sales crossed 20 million units in 2025, representing 25 percent of all new cars sold worldwide. China remained the world’s largest EV market with over 13 million electric cars sold, while Europe recorded more than 30 percent growth in EV sales.
The IEA expects global electric car sales to reach 23 million in 2026, accounting for 28 percent of total car sales worldwide.
BABURAJAN KIZHAKEDATH