The car market in India is set for growth of around 9% in 2017 according to Moody's ratings service.

Moody's said that the market will be boosted by the impact of the new GST tax regime as well as new model activity.

"Indian car sales will remain robust, growing 9 per cent this year and 7 per cent in 2018, supported by the impact of India's new goods and services tax (GST) as well as new model launches," Moody's said in its report.

The report said the GST rollout in July led OEMs to reduce prices. "Looking ahead, new model launches by domestic and foreign automakers and a seasonally stronger second half support our expectation that India's auto sales in 2017 will touch the 3.6 million unit mark," the report said.

Many analysts say that the Indian light vehicle market will eventually become the world's third largest and could grow from around 4m a year to 8m a year by the mid-2020s.

See also: India car market heading for 8m a year by 2025 - Mahindra MD