India’s commercial vehicle (CV) industry is expected to witness a gradual recovery through FY26, with the light commercial vehicle (LCV) segment emerging as the key growth driver, according to a recent report by India Ratings and Research (Ind-Ra). While overall demand has shown signs of stabilization, a sharp rebound is unlikely in the near term.

LCVs continue to outperform other segments due to their strong linkage with intra-city logistics, e-commerce, last-mile delivery, and rural freight movement, making them more resilient to economic fluctuations. In contrast, demand for medium and heavy commercial vehicles (MHCVs) remains subdued due to weak freight activity, higher vehicle costs, and extended replacement cycles.

Improving vehicle financing availability, growth in the used CV market, and potential pickup in infrastructure activity are expected to support demand over the medium term. However, the pace of recovery will depend on sustained freight demand and execution of capital expenditure projects, keeping the overall outlook cautious but stable through FY26.