Minister of Road, Transport and Highway Nitin Gadkari today reiterated that the government is not considering any proposal to impose an additional 10 percent tax on vehicles powered by diesel engines.
Gadkari said there are no proposals under consideration with the ministry, in a written reply to questions on additional tax on diesel vehicles and any government directive to move from diesel vehicles in the parliament today.
In September, at the annual conference of the Society of Indian Automobile Manufacturers, Gadkari warned domestic and foreign automakers that he would request the finance minister to impose an additional 10% tax on diesel vehicles if they do not transition to eco-friendly fuels.
However, he was quick to clarify on the same day that there was no such proposal currently under active consideration.
“In line with our commitments to achieve Carbon Net Zero by 2070 and to reduce air pollution levels caused by hazardous fuels like diesel, as well as the rapid growth in automobile sales, it is imperative to actively embrace cleaner and greener alternative fuels. These fuels should be import substitutes, cost-effective, indigenous, and pollution-free," he said on X that day.
Gadkari’s comments on an additional 10% tax on diesel vehicles had fuelled concerns among the automakers and the public as India, being the third largest automotive market in the world, has considerable sales of vehicles powered by diesel engines.
The share of diesel cars in the passenger vehicle segment has reduced to around 18% of the sales, while diesel variants continue to contribute a significant part of commercial vehicle sales.
Diesel accounts for about two-fifths of India's overall refined fuel consumption and close to 80% of the diesel consumed in the country is used in the transport sector.
Earlier in the year, a panel formed by the Ministry of Petroleum and Natural Gas recommended the government to impose a ban sale of diesel-powered four-wheel vehicles in cities with populations of more than 1 million from 2027.