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Automobile Sector of India: Emerging Trends and Problems

The National Electric Mobility Mission Plan NEMMP

India’s automobile industry is 4th largest in the World. It has witnessed immense expansion in the last few decades. India was 7th largest manufacturer of commercial vehicles in the year 2017. Being a weight-gaining industry most of the automobile industries have developed either near the market or near the major ports.  Most of these industries have been manufacturing vehicles using hydrocarbons (such as petrol, diesel, CNG etc.) as fuel.

India automobile sector

Figure: Existing Automobile Cluster of India

The number of vehicles and its sales in India has increased manifold. Due to the rise in the number of vehicles following problems are emerging.

  • Vehicular pollution (carbon emission)
  • Traffic Congestion
  • Economic cost of resource extraction for manufacturing
  • Energy demand (dependence of fuel from Middle Eastern countries)
  • Social Problems (Fight and brawl for parking and incidences of road rage)

India’s New Mobility Paradigm

As a consequence of the problems mentioned above, the NITI Ayog of India has evolved a new model, which has been termed as India’s new mobility paradigm.


With the help of this new paradigm, India envisages to take giant leap in the field of electric and hybrid vehicles. For that several programmes have been started by the government of India such as:

  • Faster Adoption and Manufacturing of (Hybrid) and electric vehicles (FAME)
  • National Electricity Mobility Mission (NEMM)
  • Automotive Mission Plan – 2026
  • Green number plates



As a result of new policy initiatives, new automobile hubs are coming up in different parts of the country. Gujarat is becoming hub of electric vehicle (EV) manufacturing. In Maharashtra, Nagpur is becoming major manufacturing centre for electric/hybrid vehicles.

Assessment of the new trend

  • Due to the ongoing economic crisis in the world, sales of automobiles have come down drastically. Push for electric vehicles and BS VI norms are putting unnecessary pressure on the already struggling automobile industry.
  • Cost of electric vehicle deters Indian consumers. The technology is costly and involves very few Indian firms.
  • It requires massive investment from the private sector, which is missing at the moment.


The crisis in the automobile sector is momentary. The push for electric/hybrid vehicle is good for the demographic dividend. It has been estimated that it will lead to direct and indirect job creation in the future. Above all, EVs will minimize India’s carbon footprints and help us in achieving our targets to mitigate the impacts of climate change.


Author: Dr. S. Fazal Daoud Firdausi