The federal government is preparing an ambitious revival strategy for the struggling automotive sector under the draft Auto Policy 2026–31, setting a bold target of producing 500,000 cars annually, boosting exports, and accelerating the shift toward electric vehicles over the next five years.
According to reports, the policy aims to increase annual vehicle production to over 500,000 units by 2031. This marks a significant recovery from a historic low of just 56,000 units in FY2022–23, following a peak of nearly 300,000 units in FY22.
In addition to expanding production, the government is targeting $1 billion in automotive exports—an important milestone for an industry that has traditionally focused on the domestic market.
The draft policy also places strong emphasis on New Energy Vehicles (NEVs), setting a target for electric and hybrid models to make up 30% of all new vehicle sales by 2031. To support this shift, authorities plan to establish around 3,000 EV charging stations across the country to promote wider adoption.
The agriculture sector has also been included in the roadmap, with a target of producing 100,000 units annually to improve farm mechanization and productivity.
After years of sharp decline, the proposed policy aims to rebuild local manufacturing, strengthen exports, and accelerate the transition toward cleaner and more sustainable transportation.
