New Delhi, April 21 : Indiaâ??s two-wheeler sales touched record high in FY26, with domestic wholesale volumes surging to around 22 million units, a report said on Tuesday.

The report from ICRA estimated that wholesale volumes grew by around 20 per cent in March 2026, while retail volumes jumped 28.7 per cent on a YoY basis, and two-wheeler domestic volumes grew by approximately 11 per cent for the full fiscal year.

The ratings agency forecasted two-wheeler wholesale volume growth to moderate to 3â??5 per cent YoY in FY2027, constrained by a higher base and a weak monsoon outlook on account of El Nino occurrence, which is likely to dampen rural demand.

However, demand is expected to remain supported by GST rationalisation and improved replacement demand, the report said.

Domestic wholesale volumes recorded a growth of 10.2 per cent YoY in FY2026, as GST reforms supported volume growth in both Q3 and Q4. Compared with modest growth of around 1 per cent in H1, industry volumes surged by 20.3 per cent in H2 FY26.

Retail sales grew by 28.7 per cent YoY in March 2026 and around 13 per cent for FY26, the report said.

The uptick was supported by GST reforms, improvement in rural cash flows, and supportive macroeconomic measuresâ??including repo-rate cuts and income tax reliefâ??which helped strengthen consumer demand, it noted.

A broadening product portfolio, catering to both entry-level and aspirational segments, further aided growth.

Electric two-wheelers gained traction as their retail volumes rose sharply to 1,92,023 units in March 2026, up 47.4 per cent YoY. Electric two-wheeler volumes grew by 21.9 per cent YoY in FY26.

Penetration of e2W within the two-wheeler segment increased to 9.4 per cent in March 2026 and stood at 3.3 per cent for the full fiscal year.

Monthly export volumes reported a growth of 17.5 per cent YoY in March 2026, despite headwinds in certain overseas markets. Overall, export volumes grew by 23.3 per cent in FY26, aided by expanding product offerings and improving global recognition of Indian two-wheeler brands.

The ongoing conflict in West Asia poses potential supply chain and export risks, with industry participants closely monitoring the evolving geopolitical situation, the ratings agency said.

/IANS