The Indian auto sector is poised for continued growth into 2026, building on a strong 2025 performance driven by GST rate cuts and favorable government policies. The Nifty Auto index has significantly outperformed the Nifty 50, reflecting optimism fueled by domestic demand, improving rural sentiment, and infrastructure spending. While many auto stocks have seen substantial gains, some, like Tata Motors and Balkrishna Industries, have experienced declines. The sector also anticipates further acceleration in EV adoption.