India CNG and LPG Vehicle Market Summary 

India CNG and LPG Vehicle Market size was valued at USD 1.56 Bn in 2025 and is expected grow to USD 2.55 Bn by 2032, growing at a CAGR of 7.34% during (2026-2032). 

India CNG and LPG Vehicle Industry Trends and Analytical Insights -

• West India CNG and LPG Vehicle Market was the largest revenue generating region market accounted approximately 38.3% of market shares in year 2025.

• In 2025, By Fuel Type, CNG (Compressed Natural Gas) dominated the India CNG and LPG Vehicle Market, accounted for 95.6 % market shares.

• Leading Key players for India CNG and LPG Vehicle Market in 2025 was Maruti Suzuki India Ltd., Tata Motors Ltd., Bajaj Auto Ltd. and Mahindra & Mahindra Ltd.

Market Size & Forecast

• Market Size 2025: USD 1.56 Billion

• Projected Market Size 2032: USD 2.55 Billion

• CAGR (2025-2030): 7.34%

• West India: Dominated market in 2025

India CNG and LPG Vehicle Market Overview

The India CNG and LPG Vehicle industry continued to emerge as a clean alternative mode of transportation in 2025 along with a new “green revolution”, due to the availability of easy-to-use, cost-effective fuel, as well as urban demand for cleaner air. It was estimated that CNG vehicles accounted for 18 -20% of passenger vehicle sales within the five major metropolitan areas of India, with cities like Delhi and Mumbai experienced the highest penetration rates at over 30%. This continued growth was largely attributed to the OEM (original equipment manufacturer) partnership model that provided the ability to buy the OEM products directly from the manufacturer, with new OEM products requiring factory-installed CNG equipment. Passenger vehicles dominated the demand for CNG, accounted for almost two thirds of the total CNG volumes, while three-wheeled vehicles and light-duty commercial vehicles continue to play a major role in high utilization applications such as ride-sharing and last-mile delivery solutions.

Alternative-fuel vehicles (CNG) (Compressed Natural Gas) accounted for more than 95% of all alternative-fuel vehicle deployments in the industry. Because of insufficient availability of OEMs, refuelling infrastructure and aftermarket solutions, propane gas vehicles (LPG) had largely overlooked, and continue to be issued in small quantities. In India there are over 7000 CNG fill stations operating in 2025, which continue to support regionally based demand concentrations, with over 60% of CNG fill stations was located in western and northern India. With respect to the two primary methods for entering the market, CNG vehicles were the two to three times the growth of retrofitted vehicles with OEM-authorized sales accounted approximately 75% of total installations, and stricter safety regulations and greater levels of regulatory oversight were fuelling OEM growth (sequences of events). New fittings of sequential injection kits make up approximately 70% of fittings and consumers prefer to buy CNG with increased fuel efficiency and smoother engine performance make the market based on urban mobility economics.

This extensive analysis by Jadhavar Business Intelligence Pvt Ltd (JBI) provides consumers with a complete and actionable picture of the India CNG and LPG Vehicle Market, including market size, share, trends, and growth estimates from 2025 to 2032. It provides a complete overview of important locations and countries by Vehicle Type, Fuel Type, and Kit Type. Clients receive comprehensive market dynamics, business tool analysis (PORTER and PESTLE), a Technology roadmap, and regulatory updates. The study also includes country-specific projections, competitive benchmarking, Company profiles, and M&A activity, all of which aid in strategic planning, market entry analysis, and competitor positioning in India CNG and LPG Vehicle Industry.

India CNG and LPG Vehicle Market Dynamics

The year 2025 had a constant fuel price differences, which became the main factor that drove India CNG and LPG Vehicle Industry expansion. The operation of CNG vehicles costs about 40-45 % less per kilometer than running petrol vehicles throughout Indian cities. The city gas distribution system expanded its network of more than 400 CNG stations. OEMs supported by adding 20% more factory-fitted CNG vehicles every year to boost customer demand.

The India CNG and LPG Vehicle Industry development faced obstacles throughout 2025 because CNG infrastructure failed to spread evenly across different areas which resulted in almost half of the districts had no dependable access to natural gas thus prevented its expansion past city regions. The domestic gas distribution system created price instability which forced the company to adjust its prices between 10-15% thus making it hard to forecast its operational expenses. The lack of sufficient boot space together with the small decrease in power output kept premium passenger vehicle buyers away from making their purchase decision.

The increasing use of CNG in fleets and ride-hailing services and last-mile delivery operations during 2025 created more than 35% of new India CNG and LPG Vehicle Market demand which led to substantial business expansion. The automotive industry expanded its CNG product line through the introduction of more than 15 new models. The development of lightweight cylinders together with dual-ECU calibration systems brought about an 8 -10% improvement in fuel efficiency which made these vehicles more attractive to buyers in both city areas and suburban communities.

Expert Insight:

The India CNG and LPG Vehicle Market in 2025 reflects a structurally maturing alternative-fuel ecosystem, where OEM-led CNG adoption has decisively replaced retrofit-driven growth. With CNG accounting for over 95% of deployments, the market is firmly anchored in urban passenger vehicles and fleet applications, supported by infrastructure concentration in western and northern India. While LPG remains marginal, continued expansion of city gas networks, localization under Make in India, and technology upgrades such as sequential injection systems position CNG as a stable transition fuel, even as long-term electrification gathers pace.

India CNG and LPG Vehicle Market Segment Analysis

The India CNG and LPG Vehicle Market is segmented into by Vehicle Type, by Fuel Type, by Kit Type and by Sales Channel.

By Fuel Type

Based on Fuel Type, India CNG and LPG Vehicle Industry is segmented into by CNG (Compressed Natural Gas) and LPG (Liquefied Petroleum Gas). The CNG (Compressed Natural Gas) segment was the dominant segment in the India CNG and LPG Vehicle Market during the year 2025, accounted 95.6% of market share. This dominance was driven by its fast-growing refuelling network which now operates more than 7,000 stations across the United States. The company received strong backing from original equipment manufacturers who installed their products in factory-built vehicles. The industry achieved operational excellence through its superior economic performance which reduced fuel expenses by 40–45% compared to standard petrol vehicles. The industry achieved operational excellence through its superior economic performance which reduced fuel expenses.

By Sales Channel,

Based on Sales Channel, India CNG and LPG Vehicle Industry is segmented into by OEM (Original Equipment Manufacturer) and Retrofitting. The​‍​‌‍​‍‌​‍​‌‍​‍‌ OEM (Original Equipment Manufacturer) segment was the major contributor to the India CNG and LPG Vehicle Market in 2025 accounted for 76.9% market shares. This dominance was driven the fast-growing demand for factory-installed CNG systems together with increasing safety requirements and homologation standards and customer preference for vehicles with official warranties and legal compliance established OEMs as the primary market leaders. The price equality between OEM products and retrofit solutions made aftermarket conversion systems less appealing to customers.

India CNG and LPG Vehicle Market Region Analysis

The West India CNG and LPG Vehicle Market in 2025 was dominant market with approximately 38.3% of market share. The states of Maharashtra and Gujarat became the primary drivers of demand because they established extensive city gas distribution networks and their urban areas contained many vehicles and their factory-built CNG passenger cars and commercial fleets reached high market penetration. The area operated more than 45% of all active CNG stations throughout India which provided drivers with better access to fuel and reduced their fear about running out of fuel. The West established itself as the fundamental market structure because taxi operations and three-wheelers and last-mile delivery services maintained their strong demand for services.

North India CNG and LPG Vehicle Market, accounted around 32% of market share, driven primarily by Delhi-NCR’s aggressive air-quality mandates and high CNG penetration in public transport and private passenger vehicles. South India CNG and LPG Vehicle Market accounted for 20%, with growth constrained by comparatively lower CNG infrastructure density, though cities such as Bengaluru and Chennai showed rising adoption in fleet and cab segments. Eastern and North-Eastern India CNG and LPG Vehicle Market maintained their early development stage with 10% market share due to infrastructure deployment moved at a slow pace yet these regions offer future expansion potential through city gas network growth into non-major cities.

India CNG and LPG Vehicle Market Competitive Analysis:

By 2025, India CNG and LPG Vehicle Industry showed Maruti Suzuki India Ltd. as its dominant player because they accounted around 65-70% of all factory-installed CNG passenger vehicle sales. The company led the India CNG and LPG Vehicle Industry because it offered the most extensive selection of CNG models and maintained competitive prices while operating through a vast network of dealers who established strong market positions in both city centers and suburban areas which made it difficult for competitors to enter the market.

Tata Motors Ltd. and Hyundai Motor Company along with other OEMs expanded their market footprint by choosing to grow their CNG product lines. Mahindra & Mahindra Ltd. and Bajaj Auto Ltd. continued to hold their market position through their active involvement in commercial vehicles and three-wheeler markets. The global market for OEMs continues to center on specific product categories which allow local manufacturers in their home countries to keep their market dominance.

India CNG and LPG Vehicle Market Scope:

Key Players –

• Maruti Suzuki India Ltd.

• Tata Motors Ltd.

• Mahindra & Mahindra Ltd.

• Bajaj Auto Ltd.

• Force Motors Ltd.

• Greaves Cotton Ltd.

• CEV Engineering Pvt. Ltd.

• Mijo Auto Gas Pvt. Ltd.

• SAGAS Auto Tec Pvt. Ltd.

• Indraprastha Gas Ltd. (IGL)

• Hyundai Motor Company

• Honda Motor Co., Ltd.

• Toyota Motor Corporation

• Volkswagen AG

• Ford Motor Company

• General Motors

• IVECO S.p.A.

• AB Volvo

• Renault Group

• MAN Truck & Bus AG

Frequently Ask Questions –

1)    What is driving the growth of the India CNG and LPG Vehicle Market?

Ans - The growth of the India CNG and LPG Vehicle Market is primarily driven by lower fuel running costs (around 40–45% cheaper than petrol), rapid expansion of CNG refueling infrastructure, rising availability of OEM-fitted CNG vehicles, and increasing focus on urban air-quality improvement. These factors together make CNG vehicles a cost-effective and cleaner alternative for both private and commercial users.

 2)    Which software or brand lead the India CNG and LPG Vehicle Market?

Ans - The India CNG and LPG Vehicle Market is led by Maruti Suzuki India Ltd., which dominates the market due to its largest factory-fitted CNG portfolio, extensive dealer network, and strong cost positioning. In terms of vehicle brands, Maruti Suzuki is followed by Tata Motors and Hyundai, while no standalone software platform plays a leadership role in this market.

 3)    What role does make in India play in the India CNG and LPG Vehicle Market?

Ans - Make in India plays a significant role in the India CNG and LPG Vehicle Market by encouraging local manufacturing of CNG vehicles, cylinders, and fuel systems, which has reduced production costs and supply-chain dependence on imports. Higher localization has enabled OEMs to price factory-fitted CNG models competitively, accelerate model launches, and scale adoption across passenger and commercial vehicle segments.

 4)    Which segment is growing fastest in the India CNG and LPG Vehicle Market?

Ans - The passenger vehicle segment with OEM-fitted CNG systems is the fastest-growing segment in the India CNG and LPG Vehicle Market, driven by rising demand for low-running-cost cars, expanding urban CNG infrastructure, and increasing availability of factory-fitted models across entry-level and mid-range price segments.

 5)    How is technology innovation shaping the India CNG and LPG Vehicle Market?

Ans - Technology innovation is shaping the India CNG and LPG Vehicle Market through the adoption of sequential injection systems, lightweight composite cylinders, and advanced ECU calibration, which have improved fuel efficiency by 8–10%, enhanced safety, and reduced performance trade-offs. These advancements have increased consumer confidence and accelerated the shift toward OEM-fitted CNG vehicles.