ICRA Sees 3-5% Growth In Domestic Two-Wheeler Volumes For FY2027

Domestic two-wheeler wholesale volumes are expected to grow 3-5% year-on-year in FY2027, according to a report released by rating agency ICRA on Wednesday. The agency said demand conditions remain supported by regulatory reforms, replacement demand and improving affordability, although growth could moderate due to an elevated base and weather-related risks.

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The industry began FY2027 on a strong footing, with domestic wholesale dispatches rising 29% year-on-year in April 2026 to 1.9 million units. ICRA attributed the sharp increase mainly to improved affordability following the implementation of GST 2.0 rationalisation measures.

Retail demand, however, expanded at a slower pace compared with wholesale volumes. Vehicle registrations increased 13% year-on-year during April, supported by lower-than-anticipated price hikes from manufacturers, stable rural cash flows and seasonal demand linked to the extended wedding season through mid-May.

Electric Two-Wheeler Segment Witnesses Continued Growth

The electric two-wheeler segment continued to see strong growth in the month. According to ICRA, retail sales of electric two-wheelers rose 68% year-on-year in April 2026, with 154,337 units sold.

Electric two-wheelers accounted for 8% of total two-wheeler sales during the month. The segment had already recorded a 21.9% year-on-year volume increase during FY2026.

ICRA said wider product offerings and improving total cost of ownership parity are contributing to rising consumer adoption in the electric mobility segment.

Exports Show Strong Recovery

India’s two-wheeler exports also registered healthy growth in April. Overseas shipments increased 38% year-on-year during the month after the industry reported 23% export growth in FY2026.

The report noted that export demand has remained resilient despite macroeconomic pressures in several international markets. Improving recovery in key overseas regions has supported shipment growth for Indian manufacturers.

Risks From Weak Monsoon And West Asia Tensions

Despite strong start for FY18, ICRA points out various downside risks that could impact industry performance over the coming quarters 

The agency said forecasts of a weak monsoon due to El Niño conditions could impact rural demand recovery, which remains a crucial driver for entry-level motorcycle and scooter sales. Rising input costs and commodity inflation also continue to remain concerns for manufacturers.

ICRA also cautioned that the ongoing West Asian conflict could disrupt supply chains and push up raw material prices. Higher commodity costs and logistics disruptions could also hit export momentum if geopolitical tensions persist.

The report added that the industry’s growth outlook for FY2027 remains dependent on rural demand trends, inflationary conditions, and stability in global energy markets over the coming quarters.