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New Rules in India Eliminate the Small Car Concession

  • February 7, 2026
  • 2 min read
New Rules in India Eliminate the Small Car Concession

According to a government document, India has dropped a planned concession for small cars under new fuel-efficiency requirements after automakers such as Tata Motors and Mahindra & Mahindra said it would benefit only one company.

A draft from September suggested that petrol automobiles weighing 909 kg (2,004 lb) or less should be given some leeway. Many people thought this was a good idea because Maruti Suzuki controls 95% of India’s small-car market.

According to the current 41-page draft reviewed by Reuters, India’s Power Ministry has taken away that exception and made other rules stricter. This puts more pressure on all automakers to sell more electric and hybrid cars.

The document noted that the new rules limit overcompensation for vehicle weight, aim to level the playing field between light and heavy fleet producers, and are intended to deliver real-world efficiency gains.

It went on to say that they create “a substantially steeper reduction pathway” for emissions. The power ministry didn’t answer when asked for a remark. Transport accounts for roughly 12% of India’s energy consumption and is a major driver of the country’s oil imports and carbon emissions.

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