Driving Jobs, Economic Growth, and Climate Action: The Role of Clean Mobility in India
India’s economic transformation aligns industrial growth with its climate ambitions. As of early 2026, the industrial sector has maintained strong momentum, recording 7% year-on-year growth in real gross value added, with high-technology segments contributing 46% of total manufacturing value added—a decisive shift toward advanced, innovation-driven production (PIB 2026).
The automotive industry is a key contributor to India’s industrial economy and employment landscape. The industry had a turnover of INR 20 lakh crore (USD 240 billion) in 2025, with total vehicle sales of 28 million units (SIAM 2025). It contributed 7.1% of national GDP, nearly 49% of manufacturing GDP, and close to 15% of total goods and services tax (PIB 2025a; PIB 2026c). It is also India’s third-largest employer, supporting over 30 million direct and indirect jobs (PIB 2026a Feb).
However, dependence on crude oil imports and rising transport emissions present macroeconomic risks. India spent around USD 150 billion on net oil and gas imports in 2025 alone (PPAC 2026). Fluctuations in international crude oil prices expose the economy to external shocks. Furthermore, road transport energy use and related emissions have doubled since 2010, accounting for 12% of India’s total CO₂ emissions in 2021, making it the third most emitting sector (IEA 2022). With emissions projected to quadruple by 2050, decarbonizing road transport is not just an environmental imperative but a strategic economic necessity (WRI 2024). Therefore, transport electrification offers a credible pathway to enhance energy security while mitigating GHG emissions.
The Government of India enables EV adoption through coordinated demand- and supply-side interventions. Purchase incentives via flagship policies, including the Faster Adoption and Manufacturing of Electric Vehicles (FAME) I and II and PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE), alongside supply-side incentives such as Production-Linked Incentive schemes, have stimulated EV demand and domestic manufacturing (PIB 2025b). These policies seek to build indigenous manufacturing capabilities and boost India’s competitiveness in emerging clean mobility value chains.
The EV transition will create new employment opportunities in battery manufacturing, charging infrastructure deployment, and battery recycling. These emerging segments present opportunities for domestic value addition, technological upgradation, and new employment generation aligned with high-skill manufacturing and services. However, internal combustion engine-specific manufacturing and traditional supply chain players could face revenue risks as demand for ICEVs declines. The ripple effects of the transition extend further, impacting employment and revenue of adjacent sectors, including fuel retail and aftermarket services, such as repair and maintenance.
Managing the transition requires evidence-based policy design and focused financial backing, grounded in rigorous impact evaluations and analysis across the automotive value chain. India’s broader energy transition ambitions reinforce this need. The Atmanirbhar Bharat (Self-Reliant India) vision includes a long-term goal of achieving energy independence by 2047. This ambition, alongside India’s commitment to reach net zero emissions by 2070, requires a gradual shift from a fossil fuel–dependent economy toward one powered by renewable energy, green hydrogen, and electric mobility (PIB 2025 Aug). This transition will require accelerated action well before 2070, with 2047 as a critical milestone given the long investment cycle across energy, transport, and industrial systems.
Against this backdrop, a 100% EV scenario assessment is key to understanding the scale of benefits, challenges, and support required across the economy. This study, therefore, conducts a quantitative, scenario-based assessment of India’s automotive value chain with EV adoption under a business-as-usual (BAU) and a full electrification (100% EV) scenario achievable with additional policy support. This report analyzes the impact of a complete transition to EVs on economic growth, jobs, and climate action in India by 2047. It captures impacts across manufacturing, employment, energy demand, and emissions to comprehensively evaluate the opportunities and transition risks associated with large-scale electrification.
