Gadkari took to social media platform X later to clarify that no such proposal is under active consideration by the government.
“Request industry to reduce production of diesel vehicles else imposing additional tax will be necessary,” Gadkari said. “I would urge you to reduce production of diesel vehicles. If you don’t reduce, we have to increase taxes. We will increase taxes so much, you will find it difficult to sell diesel vehicles”, Gadkari said.Sales of diesel vehicles in the Indian market have declined since prices of the fuel was de-regulated in 2014. About 18% of all passenger vehicles sold in the local market ran on diesel in the last financial year, from 53% in FY14.
“After 2014, 52% of the (number of) diesel vehicles reduced to 18%. Now that the automobile industry is growing, diesel vehicles shouldn’t increase. You make decisions at your level so that diesel (vehicle) is reduced. If it wouldn’t happen, then I would recommend to the Finance Minister that diesel is creating a lot of pollution so a 10% additional tax should be levied on it,” Gadkari said.
Gadkari said the automobile industry should work on accelerating the transition to electric, bio-fuels to curb vehicular pollution and crude imports.
However, levying a 10% additional indirect tax on such vehicles will take a toll on the automobile industry’s sales as almost all commercial vehicles in India typically run on diesel.”Any additional tax will have an impact on sales,” automobile giant M&M told ET Now. Following Gadkari’s statements at the convention, share prices of M&M, Tata Motors and Maruti Suzuki were trading with losses of 2.38 per cent, 2 per cent and 0.8 per cent each, as of 12:00 pm.
Gadkari has made his views clear on the drawbacks of diesel vehicles in the past as well. Back in 2021, Gadkari had called for vehicle manufacturers to discourage the production and sale of diesel-engine vehicles and urged them to promote other technologies.
Earlier in May, the Energy Transition Advisory Committee had suggested that India should ban diesel-powered four-wheelers in all cities with a million-plus population by 2027. The Energy Transition Advisory Committee was set up with former petroleum secretary Tarun Kapoor as its head and executives from state-run oil companies and an oil ministry official as members.