Indian Bus Industry Set to Achieve Rs 104,000 Crore Value by 2026

Key Highlights:
•    Indian bus industry is projected to reach Rs 104,000 crore by 2026.
•    State Transport Undertakings (STUs) to grow at 6.36%, private buses at 7.37% CAGR.
•    Karnataka, Maharashtra, Tamil Nadu lead STU market; UP, Maharashtra top private bus TAM.
•    Online ticketing rising; demand for value-added services like live tracking increasing.
•    Potential for private sector involvement in intra-city bus travel, driving industry innovation.

The Indian bus industry is on a remarkable trajectory, projected to achieve a valuation of ₹104,000 crores by 2026. This growth is driven by a compound annual growth rate (CAGR) of 6.64%.

Recently, a report called 'Traveltech 2.0: The Next Phase of Digitally Empowering the Indian Traveler' was released. It was put together by two organizations: the Internet and Mobile Association of India (IAMAI) and Grant Thornton Bharat. This report talks about how technology is changing the way people travel in India.

According to the report, the bus industry in India is expected to grow a lot. This means more people will be using buses to travel from one place to another. The report tells us that technology is playing a big role in this growth. It's making it easier for people to book bus tickets online and find information about bus routes and schedules.

Projected Growth Rates

According to the report, the bus industry is poised to reach a value of Rs 104,000 crore in 2026, showcasing a compound annual growth rate (CAGR) of 6.64 per cent. 

Notably, State Transport Undertakings (STUs) are projected to experience a CAGR of 6.36 per cent, while private buses in India are expected to grow at a rate of 7.37 per cent. The report was unveiled at the prestigious India Digital Summit (IDS) 2024, held in Mumbai.

Geographical Trends

Key states such as Karnataka, Maharashtra, Tamil Nadu, Andhra Pradesh, Telangana, and Uttar Pradesh have emerged as principal markets for STUs, collectively constituting nearly 70 per cent of the market share. 

Meanwhile, Uttar Pradesh, Maharashtra, Rajasthan, Punjab, and Haryana are identified as the top five states contributing to around 45 per cent of the total addressable market (TAM) for private buses by 2026.

Rise of Online Ticketing

Online ticketing is gaining traction among bus travellers, although the non-AC and intra-city bus ticketing segments remain largely offline-based due to price sensitivity. However, there's a visible shift towards digital platforms, indicating a growing preference for online services.

Opportunities for Value-added Services

Surface transportation services, including buses, present significant opportunities for online travel agency (OTA) service providers to offer value-added services alongside basic online ticketing. Services such as live bus tracking and digital ticketing are increasingly being adopted in intra-city bus services, indicating a demand for enhanced passenger experiences.

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Scope for Private Sector Involvement

Intra-city bus travel is primarily served by STUs, presenting a substantial scope for private sector involvement. The report highlights the potential for private entities to contribute to this segment and enhance service offerings.

User Preferences for Online Services

While some users continue to rely on offline ticketing due to habit, there is a growing interest in online services. Features such as seat availability information, reservation options, competitive pricing, discounts, and diverse offerings within specific price ranges are identified as key factors driving this interest.

CMV360 Says

The projected growth of India's bus industry signals significant opportunities for both public and private stakeholders. With increasing digitalization and evolving consumer preferences, there's a clear path for enhancing passenger experiences and expanding service offerings.

The focus on value-added services and online ticketing reflects a promising shift towards convenience and efficiency in intra-city and inter-city travel.