Nitin Gadkari says no plans for additional tax on diesel vehicles

Union Minister of Road, Transport and Highways Nitin Gadkari has reiterated that the government is not considering any proposal to impose an additional 10 percent tax on vehicles powered by diesel engines. He said this in a written reply to questions in Parliament asking about the same, and if there was any government directive to move from diesel-run vehicles. 

1. Gadkari confirms no proposal for additional diesel tax
2. He had said diesel needs to be phased out for greener fuels
3. Banning diesel four-wheeler sales in large cities from 2027 mooted

In September, at the annual conference of the Society of Indian Automobile Manufacturers, Gadkari had warned domestic and foreign automakers that he would request the finance minister to impose an additional 10 percent 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. 

On X (formerly Twitter), the minister had then said: “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.” 

Gadkari’s comments on an additional 10 percent tax on diesel vehicles had fuelled concern 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 percent 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 percent 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 impose a ban on the sale of diesel-powered four-wheel vehicles in cities with a population of more than 1 million from 2027.