How India is strengthening the four pillars of the car testing world

The agencies—Automotive Research Association of India (ARAI), Pune; International Centre for Automotive Technology (Icat), Manesar; Global Automotive Research Centre (Garc), Chennai; and National Automotive Test Tracks (Natrax), Chennai—will be upgraded at a total cost of ₹776.29 crore, two government officials aware of the plan said on the condition of anonymity.

The initiative by the Union heavy industries ministry aims to help agencies speed up vehicle certification and build expertise in vehicle connectivity, cybersecurity, alternate fuels and electric and hybrid vehicles in the world’s third-largest automobile market by sales. The four agencies ensure vehicle safety, environmental compliance, and performance standards through rigorous certification and R&D testing.

The Centre has already set the process in motion, a government document showed. State-run Bharat Heavy Electricals Ltd (BHEL) has already issued 65 tenders for the work, which will be done under the ₹10,900 crore PM E-Drive scheme launched in October 2024.

The upgrade will expedite vehicle launches, with the test results providing clarity and certainty for underwriting assets in terms of vehicle performance, battery durability, and software reliability, the people cited above said. This is expected to lead to better access to capital and investments in the new-age mobility sector including the electric vehicles (EVs).

“If I were an EV maker, and I had to submit my vehicles for testing and approval to any of these testing agencies, I would face a waiting line of 6-8 months. The spending on upgrading these testing agencies is effectively aimed at bringing the waiting time down to zero, because with every passing day without approvals, an automaker may lose out on margins and market share,” one of the two official cited above said on the condition of anonymity.

India’s EV adoption has climbed over the years, with more than 2 million EVs sold in 2025, compared to 1.9 million in 2024. About 8% of the 27.4 million new vehicles sold in India in 2025 were electric, compared with 7.4% in the previous year, according to data from the central government’s vehicle registry portal Vahan.

Out of the corpus, Arai will get ₹79 crore, Icat ₹217 crore, Garc ₹221 crore, and Natrax ₹257 crore, the official added.

The work done by these agencies is used to determine whether a vehicle is eligible to claim incentives under the government’s PM E-Drive scheme and the PLI-Auto scheme. Arai in its annual report for FY25 in September 2025 (latest available) said it approved 80 localization applications under the PLI-Auto scheme—more than double the 39 approvals in FY24. Similarly, Arai also provided approvals for over 350 vehicle models under the PM E-Drive scheme in FY25, the first year of the scheme.

Queries emailed to the spokespersons of the heavy industries ministry, BHEL, ARAI, ICAT, Garc and Natrax on 2 February remained unanswered.

Augmenting vehicle testing facilities is critical given the high environment, safety and operational costs of the automotive sector, said Sharif Qamar, associate director of Transport and Urban Mobility at The Energy and Resources Institute (Teri), a think tank.

“Research and development in enhancing the capabilities and capacity of Indian testing agencies desires a higher degree of focus to bridge the gap between domestic and international agencies. The standards developed and testing performed have a huge multiplier effect, as seen in the improvement in the safety of batteries used in EVs with extremely low rate of untoward incidents as compared to ICE vehicles. Segments such as commercial vehicles and buses, which are critical for safety and emissions testing and require huge investment, are often missed out,” he said.

The upgrades aim to match the testing agencies’ capacity with the advanced automotive technologies that the government has incentivized under the ₹25,938-crore production-linked incentive scheme for automobiles and auto parts and changing needs of the automobile industry towards vehicle connectivity and software-driven vehicles, the second official cited added.

While driverless vehicles are not permitted in India yet, driver-assistance technology is legal; for example, levels 1 and 2 of Advanced Driver Assistance Systems (ADAS) which provides features such as adaptive cruise control, lane assistance, and driver attention monitoring. ADAS level 3, for instance, has conditional automation, meaning the vehicle drives itself in certain conditions.

Further advancements in automated vehicles allow the vehicle to assess traffic and steer into different lanes. Also, as India prepares for large-scale long-haul electric mobility across national corridors, the effort focuses on creating common communication and interoperability protocols that will allow electric cars, buses and freight vehicles to integrate with third-generation (3G) mobility networks, including charging infrastructure, tolling systems, roadside assistance and V2X platforms.

India has laid the groundwork for an ambitious push into autonomous vehicles, with the government developing a new system called the Connected Commercial Vehicle (CCV) protocol, which would allow different types of vehicles and infrastructure to communicate using a single standard, making it easier for them to operate together seamlessly, as reported by Mint earlier.

The upgrade comes against the backdrop of NITI Aayog in April 2025 noting that lack of adequate testing centres could adversely impact India’s competitiveness.

“India also lacks advanced testing and validation centres that are critical for developing next-generation automotive technologies. Facilities for battery research, vehicle safety testing, and simulation labs for autonomous vehicles are either underdeveloped or unavailable. Without proper infrastructure in place, Indian manufacturers are often forced to outsource R&D to foreign labs, increasing both costs and lead time,” the federal policy think tank said in an April 2025 report.

India’s automobile market, which recorded 26.8 million units in sales in 2025, was valued at about $137.06 billion, according to Mordor Intelligence, a market intelligence firm. Its EV market was valued at $54 billion and the hybrid market at about $0.53 billion. Mordor estimated that the EV market would double in value and the hybrid market would more than double in value by 2029.

Better testing facilities can also clear the financing roadblock for EV adoption by providing clarity to financiers.

“A clearer and more robust testing framework and infrastructure will reduce technical uncertainty around vehicle performance, battery durability, and software reliability—all of which are critical inputs into underwriting. Stronger testing reduces technology risk, and reducing technology risk is what unlocks large pools of institutional capital into EVs and next-generation mobility,” said Kunal Mundra, founder and CEO of Astranova Mobility, a Gurugram-based EV financier.

This comes at a time when India’s adoption of electric mobility is rising and costs are coming down. The cost of EV batteries – which makes up at least a third of the vehicle’s overall cost – has fallen from approximately $156 per kWh in 2019 to an estimated $105 per kWh in 2026, according to BloombergNEF.

Moreover, a December 2025 report by KPMG said price parity between the total cost of buying and operating an electric two-wheeler and a petrol two-wheeler has almost been achieved in India.