Finance costs, global demand near-term hurdles for auto sector: Eco Survey

Among structural issues, increase in long-term third-party vehicle insurance premiums has spiked total upfront insurance cost by 10-11%, especially for two-wheelers

Higher borrowing costs and tempering global demand are the near-term hurdles for the Indian auto industry even as its outlook is upbeat, said the Economic Survey for 2023-24 on Tuesday.

Among structural issues, the increase in long-term third-party vehicle insurance premiums has increased the total upfront insurance cost by about 10-11 per cent, especially for two-wheelers, the Survey mentioned.

Therefore, the two-wheeler segment has been the most affected, with the lowest sales in the past ten years, it said. "Addressing these challenges will boost the automobile industry," it added.

"Despite the upbeat outlook, the automotive industry faces certain challenges. Higher