New Delhi, May 20 (IANS) India’s two-wheeler industry expected to witness wholesale volume growth of up to 5 per cent year-on-year in FY2027, supported by GST rationalisation and improving replacement demand, according to a report released on Wednesday.

A report by ICRA has highlighted that domestic two-wheeler wholesale volumes recorded a sharp increase of 29.2 per cent year-on-year in April 2026 to reach 1.9 million units due to improved affordability following the implementation of GST 2.0 reforms.

However, it cautioned that growth momentum may moderate in the coming months due to a high base effect, weak El Niño-led monsoon forecasts, fuel-driven price hikes and rising input costs.

The report showed that retail demand also remained healthy during the month, with volumes rising 13 per cent year-on-year, supported by lower-than-expected price hikes, sustained rural cash flows due to strong agricultural output and the extended wedding season till mid-May.

Moreover, the electric two-wheeler (e2W) segment continued to gain momentum as retail sales in the two-wheeler segment stood at 1,54,337 units in April 2026, a strong 68.1 per cent year-on-year growth.

For FY2026, e2W volumes expanded by about 22 per cent, while penetration within the overall two-wheeler market reached 8.1 per cent in April 2026.

The segment’s steady growth reflects increasing consumer acceptance, aided by expanding product availability and improving cost competitiveness, according to the report.

In addition, exports remained a key growth driver for the industry, with monthly export volumes increasing 38.3 per cent year-on-year in April despite headwinds in certain overseas markets.

For FY2026, overall two-wheeler exports grew 23.3 per cent, supported by expanding product portfolios and rising global recognition of Indian two-wheeler brands.

However, the report flagged that geopolitical uncertainties, especially ongoing tensions in West Asia, could continue to pose risks to supply chains and export performance.

–IANS

ag/