India’s two-wheeler exports are expected to grow 15-20 per cent year-on-year in FY27, extending their strong momentum for a third consecutive year, as demand recovers in Africa and manufacturers expand in Latin America and Southeast Asia, India Ratings and Research (Ind-Ra) said.
Exports rose 23 per cent year-on-year to a record 5.18 million units in FY26, surpassing the previous high of 4.44 million units in FY22. The momentum continued in the first quarter of FY27, when shipments increased 37 per cent.
Ind-Ra said the current export upcycle appears increasingly structural rather than purely cyclical. Indian manufacturers have widened their geographic reach, strengthened distribution networks and introduced market-specific products. Colombia, Mexico and Brazil have emerged among India’s top 10 two-wheeler export destinations, reducing the industry’s historical dependence on Africa.
Demand is also reviving in major African markets as inflationary pressure eases and foreign-exchange availability improves. Exports to Nigeria, India’s largest two-wheeler export market until FY24, began recovering in FY26. However, shipments remain at about 39 per cent of their FY22 level, indicating substantial headroom for growth.
Sri Lanka’s gradual relaxation of vehicle-import restrictions has provided another boost.
Low two-wheeler penetration, inadequate road infrastructure and the use of motorcycles for public transport and last-mile delivery are expected to sustain medium-term demand across emerging markets. Commercial motorcycle-taxi operators account for an estimated 40-50 per cent of Nigerian two-wheeler demand, according to industry reports cited by Ind-Ra.
The rising share of premium products and a weaker rupee are also improving export realisations and profitability. While overall export volumes recorded a compound annual growth rate of 3.9 per cent between FY22 and FY26, shipments of motorcycles above 200cc grew 12.8 per cent and scooters 18.2 per cent.
Ind-Ra expects the direct impact of the West Asia conflict to remain limited because nearly 80 per cent of exports go to Africa, Latin America and Southeast Asia, while exposure to Gulf markets is relatively small.
Leading manufacturers, including Bajaj Auto and TVS Motor, have expanded their international operations through overseas assembly and manufacturing facilities. Companies with global parentage are also using India as an export hub, supported by lower production costs, the ratings agency said in its report.
Risks include higher commodity, freight and logistics costs, weak purchasing power in price-sensitive markets, currency volatility and potential import restrictions.
Competition from Chinese manufacturers is particularly significant in electric two-wheelers. Although India’s electric two-wheeler exports tripled in FY26, they accounted for less than 1 per cent of total shipments.
