(Bloomberg) — Traffic on Indian roads is expected to increase 14% this year as Asia’s third-largest economy recovers from the worst of the pandemic, a trend that should spur demand for gasoline, according to analytics firm Crisil Ltd.
An easing of pandemic-related curbs and a revival in industrial production last quarter saw traffic surge 57% from a year earlier, Crisil said in a report published Wednesday. Indians also favored personal cars over shared transport, it said. Still, the recovery may be short-lived with a possible third virus wave in a country that’s already recorded more than 32 million Covid cases.
Traffic fell 5% in 2020 after the country went into lockdown, according to Crisil, which didn’t provide a total figure or forecast for vehicles on India’s roads. According to a report from the Ministry of Road Transport and Highways, there were about 296 million vehicles registered in the country as of 2019.
“The credit profiles of players in the road sector are expected to remain strong, and their debt-servicing ability has not deteriorated due to the pandemic-related disruptions,” said Anand Kulkarni, a director at Crisil.
Covid and the global semiconductor shortage have left Indian automakers struggling to meet demand. The nation’s biggest carmaker, Maruti Suzuki India Ltd., said Tuesday its output is likely to drop as much as 40% in September, while Tata Motors Ltd. said Wednesday it is also having to cut production.
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