India, now the third-largest automobile market globally, has witnessed remarkable growth over the years. In the last decade alone, the industry has tripled in value from ₹7 lakh crore in 2014 to ₹22 lakh crore in 2024. Yet, there’s a long road ahead. India’s auto market is still half the size of China’s and a quarter of the United States. But the ambition is clear: to surpass both in the next decade.
India’s vision for dominance is intrinsically tied to alternative and biofuels. As Nitin Gadkari, Minister of Road Transport, aptly puts it, “Globally, the US is number one with an auto industry size of ₹78 lakh crore. China follows with ₹47 lakh crore, and India stands at ₹22 lakh crore. We aim to be number one within the next decade because of alternative and biofuel.”
This shift is powered by three key factors:
- Emission Targets: India plans to cut carbon emissions intensity by 45% by 2030.
- Reducing Fuel Imports: With 90% of crude oil imported, costing $71 billion annually, clean fuels offer a way to reduce dependency.
- Cost Efficiency: Clean fuel vehicles are significantly cheaper to operate. For instance, running a CNG vehicle costs ₹1 per kilometer compared to ₹2.25 for petrol.
The Fuels Driving the Future
1. Electric Vehicles (EVs)
EVs are at the forefront of India’s clean mobility revolution. The EV market, valued at $23 billion in 2024, is projected to surge to $118 billion by 2032. The government aims to have 80 million EVs on the roads by 2030, accelerating from just 6% adoption today.
Major automakers, from Maruti to Mercedes, are fully committed to electrification. Over 40 new car models are expected in 2025, with most relying on clean fuels.
2. Hybrids
Hybrids offer a balanced approach, blending electric power for shorter trips with traditional fuels for longer journeys. They’re cost-effective, eco-friendly, and a practical stepping stone toward full electrification.
3. Ethanol
India is aggressively pushing for ethanol-blended petrol, targeting 20% blending by 2025. Inspired by Brazil, where 80% of vehicles run on ethanol-blended fuel, India is poised to reduce its oil dependence significantly. Automakers like Tata, Mahindra, and Hyundai are gearing up to launch 100% ethanol-powered cars in the coming months.
4. CNG and LNG
Compressed Natural Gas (CNG) and Liquefied Natural Gas (LNG) are cleaner and more affordable alternatives to petrol and diesel. CNG vehicle sales surged by 30% in FY25, and major brands are expanding their CNG offerings, including Honda, which plans to unveil a CNG variant of the Amaze sedan.
5. Hydrogen
Touted as the “fuel of the future,” hydrogen is clean, versatile, and ideal for heavy vehicles like trucks and buses. India is exploring innovative methods to produce hydrogen, including leveraging municipal waste and biotechnology to create methane, which can then be converted into hydrogen.
The year 2025 is pivotal in India’s journey toward sustainable mobility. With a slew of new vehicle launches, only 20% of new models will rely solely on petrol or diesel, and even those will likely include hybrid options.
This shift marks the mainstream adoption of clean fuels, setting the stage for a future where sustainability takes precedence over speed.
The Indian automobile industry is not just driving toward growth—it’s steering the world toward a greener tomorrow. The revolution that began with the Maruti 800 now finds its next chapter in clean, innovative fuels.
