Last year, Nitin Gadkari dropped a bomb on car manufacturers by saying that Indian govt plans to make all-electric cars mandatory by 2030. He added: “I am going to do it, whether you like it or not. I will bulldoze. Petrol diesel banaane walon kaa band-baajaa bajaanaa hai.”
However, now this ambitious plan has been dropped and Indian govt has now proposed a new ‘ technologically agnostic plan. This plan will encourage car manufacturers to push greener cars but not force them. According to the newly proposed plan, the vehicle manufacturers will also be incentivized based on the average fleet emission norms. Presently, tax bracket of a vehicle is decided based on the engine size, dimensions, and body style. Incentivising based on average fleet emissions it a standard practice in many developed countries. Also read: China suspends production of 553 car models.
This new policy will allow manufacturers the freedom to take any approach to manage their fleet emission norms. And they are open to experimenting with various forms of powertrains including Petrol/Diesel, Ethanol, Hybrid, Electric, Bio-diesel etc. Manufacturers will push to meet the fleet emission goals but if they exceed it, then the collected carbon-credits can be sold to collect more revenue.
The cars with emissions less than 155gm/km will be incentivized more. This includes lower import duty and CESS. Moreover, the government also plan to lower the interest rates and road taxes on such vehicles. This 155gm/km threshold will be brought down to 110gm/km by 2028.
All said, this policy is still in the draft phase and some more modification could be made to it. However, vehicle manufacturers are relieved as they can now take a different approach to reduce pollution rather than being forced to go all-electric. While this is a good news and a sensible approach to a problem, the initial statement of Nitin Gadkari was unnecessary.