The Indian economy is facing a slowdown, with some industries far more affected than others.
India’s car industry has taken a particularly brutal beating recently, causing worries of mass layoffs. Over 100,000 Indian auto workers have already lost their jobs amid the current economic slowdown in the country. The industry declined for the tenth month in a row in August, with car sales dropping by 41%, the largest drop seen in two decades. The Indian car industry is one of the country’s largest, representing about 7% of India’s GDP while employing over 35 million people directly or indirectly. Now that demand is going down to dangerous lows, there are fears that far more jobs will be lost.
The broader Indian economy is facing a slowdown. The country’s GDP grew by 5% last quarter, the slowest growth seen in five years. This slowdown also comes amid a banking crisis that is making it increasingly difficult for Indians to access credit. The Indian economy has also seen a dramatic drop in private investment. These factors have reduced consumer demand.
One of the possible reasons for the slowdown in India’s car industry could be the shift towards electric vehicles. The Indian government is moving forward with plans to make a transition towards electric vehicles over the course of the next decades. Some experts cite this as a contributing factor to falling vehicle sales in India.