Premium Bikes, EVs Continue To Drive India’s Two-Wheeler Growth As Entry-Level Demand Slows

By Shubhangi Bhatia

What?  

India’s two-wheeler industry is on course for growth in FY27, but the expansion is uneven. Electric vehicles (EVs), scooters and premium motorcycles are doing the heavy lifting, while entry-level buyers are holding back.

Premium motorcycles are bikes with engine capacity above 150cc, while entry-level bikes range from 100cc to 125cc. The latter are high-mileage and low-maintenance motorcycles, typically having a starting price of Rs 80,000.

“FY27 will end in positive territory, probably marking a higher single-digit or early double-digit growth,” Federation of Automobile Dealers Associations (FADA) president Sai Giridhar told The Core. That follows 13% growth and 21.4 million retail sales in FY26.

On the ground, the picture looks healthy. Dealers hold 20-30 days of inventory, which Giridhar calls “comfortable,” as the Dhanteras-to-Diwali festive window nears.

Growth is expected to moderate in the second half of the fiscal year, but that largely reflects the difficulty of matching last year’s GST-driven surge rather than a deterioration in overall demand. Whether the premium end can sustain industry growth while entry-level demand lags will be an important test for manufacturers in the coming quarters.

Why?

The market is K-shaped. Bajaj Auto’s Rakesh Sharma says entry-level buyers who depend on regular cash flows have been postponing purchases, while higher-income customers keep buying pricier products.

He also flagged difficult conditions due to weak monsoons in parts of Maharashtra, southern India and the Northeast. “This might play out actually more in quarter four, when the harvests are supposed to happen.”

Financing remains supportive for now. Despite the RBI’s 25-basis-point repo rate hike to 5.50%, its first in nearly four years, NBFCs are holding off passing it on to customers until the festive season ends.

Exports could add another layer of uncertainty. They have been a bright spot, especially for Bajaj Auto and TVS Motor as exports contribute about 40% of Bajaj’s revenue, while TVS draws roughly 24% of its overall turnover from overseas.

Primus Partners’ Anurag Singh warns that manufacturers with heavy shipments to El Niño-affected countries could be potentially at risk, as droughts, heavy rain or heatwaves in Africa, Latin America and Southeast Asia squeeze farm incomes and demand.

Why It Matters

The festive season looks well covered as dealers are stocked, financiers are holding off on the rate hike, and EVs, scooters and premium bikes are carrying the momentum.

Giridhar suggests that rural incomes no longer depend solely on agriculture, with transportation, warehousing and other non-farm businesses providing work. But the entry-level segment is the industry’s volume backbone and the most sensitive to income and credit conditions.

So, what comes in the next six months will tell us whether this is a broad recovery or a two-speed market that only looks healthy from the top.

If the buyer who depends on regular cash flows stays on the sidelines, will the premium end be enough to keep the industry’s growth story going in the long run?

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162.5 metric tons

That’s how much gold India bought in the September quarter of 2026, a 29% decline from a year earlier, according to a World Gold Council (WGC) report. 

Demand recovered 24% from the previous quarter but remained under pressure from record-high prices. 

Domestic gold prices averaged Rs 1,48,891 per 10 grams, 45% higher than a year earlier.

Origin: High prices have made gold increasingly unaffordable for Indian households.

Jewellery demand fell 20% year-on-year to 100 tonnes, while investment demand for bars and coins dropped 40% to 55 tonnes.

Future: The WGC expects demand to recover during Diwali and the wedding season. However, elevated prices could limit purchases. However, elevated prices and weaker rural incomes after a poor monsoon could cap demand. More than half of gold demand comes from rural buyers.

India Needs Three Big Airlines: Adani

India needs three large national airlines to meet rising passenger demand and improve international connectivity, Adani Airports CEO Arun Bansal said on Tuesday at Delhi Aviation India 2026. He said IndiGo and Air India need a third carrier of comparable scale to strengthen the country's aviation ecosystem, The Economic Times reported.

Context: The call comes after IndiGo's December 2025 operational meltdown, when it cancelled 2,507 flights and delayed another 1,852 over three days, leaving more than three lakh passengers affected. IndiGo and the Air India Group together control nearly 90% of India's domestic market, making the sector vulnerable to disruptions at either airline.

A third strong carrier can provide greater competition and alternative capacity.

Highlight: Bansal called for Indian carriers to build global scale and service standards before the country considers greater international competition.

Passenger traffic could rise nearly fourfold to 1.1-1.2 billion by 2040-45, requiring more aircraft, airport capacity and regulatory changes. Adani Airports plans to invest $10-11 billion over seven years in airport infrastructure and related businesses.

Food Inflation Bites

India could face prolonged food inflation as a weak monsoon threatens winter crop production and rising input costs push up prices of essential foods, including grains, chicken and milk, Reuters reported. 

Critical Moment: Millions of farmers, particularly in southern and western India, are facing water shortages as they prepare to sow winter crops. Low soil moisture raises the risk of weaker yields, while El Niño could further threaten agricultural output. Food inflation could reach around 10% in the October-December quarter, Devendra Pant, chief economist at India Ratings and Research, told Reuters. El Niño could also increase North India’s pollution problem, as The Core reported.

Impact: Rising animal feed, transport and energy costs are also driving up protein prices. Chicken prices could climb further from January, potentially forcing lower-income households to cut back on protein-rich foods. Higher global commodity prices, a weaker rupee and rising freight costs are limiting relief from imports.

Air India Wants More Wide-Bodies

Air India wants to increase its order for wide-body aircraft to strengthen its international network, CEO Tewolde Gebremariam said at the Aviation India event in New Delhi on Tuesday. The airline has been in talks with Boeing and Airbus, Reuters reported, citing an industry source.

Why It Matters: The move comes as Air India looks to replace ageing wide-body jets, which are expensive to operate and less fuel-efficient. Newer aircraft could also help the airline connect more international destinations and navigate restrictions on using Pakistani airspace.

Turning Point: Air India is attempting to reinvent itself under Tata Group ownership through a multi-billion-dollar transformation involving fleet renewal, cabin upgrades and network expansion. However, mounting losses, higher operating costs and geopolitical disruptions continue to weigh on its turnaround. Gebremariam said the airline would return to profitability "very soon".

Qatar Open To US Gas For India

Qatar is ready to consider India’s request to include liquefied natural gas (LNG) from the United States in its new supply deal with India, a senior Petronet LNG official said on Tuesday. India wants more sources of gas after the West Asia war disrupted supplies.

Vivek Mittal, a group general manager at Petronet, said the company has already held talks with Qatar about this. The new deal starts in 2028.

The Lead: In March, QatarEnergy stopped guaranteeing supplies after the war closed the Strait of Hormuz and its Ras Laffan plants were attacked. This stays in place through December for now. India has since bought gas from the US, Oman, Nigeria, Angola and Australia.

Context: Qatar is India’s biggest supplier of LNG and sends Petronet 7.5 million tonnes a year. The current contract ends in April 2028 but has been extended to 2048. If Qatar supplies US gas too, India would not be left short when one source is disrupted.

Mittal said Qatar could supply some gas from other sources it has lined up.

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