Nitin Gadkari says India won’t increase tax on diesel engines, spirit is to shift towards green fuels: Exclusive

Minister of Road Transport and Highways Nitin Gadkari on Thursday, September 14, asserted that the Union government is not looking to increase tax on diesel vehicles but that the spirit is to encourage the use of green fuels.

"I'm not against diesel or diesel cars. I'm not advocating for a tax increase on diesel vehicles. But we should move towards green fuels. The vision and mission for industry should be to move towards biofuels," he told CNBC-TV18 in an exclusive interaction. "Farmers who have been our 'annadata' can now also become our 'powerdata' with the thrust on biofuels"

Gadkari’s remarks come days after he, at the Society of Indian Automobile Manufacturers (SIAM) Convention, said he would request Finance Minister Nirmala Sitharaman to impose an additional 10 percent goods and services tax (GST) on diesel engines and vehicles.

However, he was quick to clarify that there was no such proposal currently under active consideration by the government. “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 wrote in a post on X.

The minister underlined the huge fossil fuel import bill of Rs 16 lakh crore and said the industry should help reduce pollution which is a serious issue.

Earlier on Wednesday, September 13,  also said that the government would not make six airbags mandatory for cars.

Today, in the CNBC-TV18 interview, he said a notification for making six airbags mandatory was not needed as it is already in implementation.

He said the purpose of the proposed notification has been achieved and with Bharat NCAP (New Car Assessment Programme), enough market forces have already been created for companies to provide six airbags. Only one company is yet to implement it and Gadakri's expectation is it will do so as well.

"More than 95 percent of the industry has already moved to six airbags and for exports, it is already mandatory in international cars," he said.

At present, it is mandatory for automakers to install airbags in the driver and co-passenger seats. These rules came into effect in July 2019 and January 2022, respectively.

Meanwhile, at an Auto Retail Conclave earlier in the day, the minister also said dealers of automobiles should also open vehicle scrapping facilities.

He said the government is encouraging a circular economy, and accordingly the government will give permission to dealers to start vehicle scrapping facilities.

The minister pointed out that India is the fastest growing major economy in the world and auto dealers will play an important role in making India a $5 trillion economy.