Indian auto industry to be world's largest in 5 years, EVs to drive growth: Nitin Gadkari at Green Bharat Summit

Highways minister Nitin Gadkari in conversation with Moneycontrol managing editor Nalin Mehta during the Green Bharat Summit.

Union Minister for Road Transport and Highways Nitin Gadkari on Friday said that he expects the Indian automobile industry to become the largest in the world in five years and sees Electric Vehicles as the biggest drivers in this growth journey.

Speaking to Nalin Mehta, Managing Editor, Moneycontrol, at the Network 18 Green Bharat Summit in New Delhi, Gadkari said that the size of the automobile industry has grown to Rs 22 lakh crore from Rs 7 lakh crore when he took charge as the minister.

"Today, the size of the industry has grown to Rs 22 lakh crore and we have just surpassed Japan. as the third largest auto industry in the world. USA tops the list with the size of the industry estimated at Rs 78 lakh crore followed by China at Rs 47 lakh crore. I am confident that in 5 years, we will be number one in the world and e-vehicles will be the primary factor driving the growth of the industry," Gadkari said.

He claimed that India has ample manpower, raw materials, and all other factors needed to push India towards the goal. The Union Minister stated that changing from fossil fuel-powered vehicles to electric vehicles will be economically viable. It will also allow India to increase jobs while increasing exports and business.

The Indian automobile industry's market size is approximately Rs22 lakh crore. China leads with Rs47 lakh crore, followed by the US at Rs78 lakh crore.

The minister further said that EV-makers are likely to see increased demand in the domestic as well as the export market due to the quality, design and cost of products manufactured in India.

"Sky is the limit and I am confident that this industry is going to fulfil the dream of our Prime Minister to make India Aatmanirbhar Bharat," he said.

Gadkari further lauded the growth witnessed in the EV sector in the auto industry and expressed optimism about the increased adoption of EVs in India.

"EVs are much cheaper if you compare it with petrol and diesel. For every Rs 120 you would spend travelling in a car or a scooter, the cost for EVs would only be Rs 10-12 while the same for CNG would be Rs 50. So EVs are import substitute, cost-effective, pollution free and indigenous," he added.

In September Gadkari had predicted that the Indian electric vehicle market potential is likely to touch Rs 20 trillion by 2030 across the entire EV ecosystem while hitting 10 million units annual sales. He had further forecasted that the market for electric vehicle (EV) financing could expand to an estimated Rs 4 lakh crore by 2030.

Presently, there are 30 lakh electric vehicles registered in India with two wheelers making up 56 per cent of total sales. In 2023-24 there was a 45 per cent increase in sales of EVs, the minister noted.

Gadkari had also said that the cost of EVs is expected to match that of petrol and diesel vehicles within the next two years. He had also proposed that surplus food grains in India could be used to produce alternative biofuels, describing biofuels as import substitutes that are cost-effective, pollution-free, and indigenous.

The minister had also highlighted how alternative fuels could benefit the agriculture sector, rural areas, and tribal regions by boosting income.