India plans rules to boost car fuel economy to curb oil imports


Vehicles queue in a long traffic jam in New Delhi, India, February 19, 2026. REUTERS/Bhawika Chhabra

NEW DELHI: India is proposing rules to improve fuel efficiency of passenger vehicles as it seeks to curb oil imports and reduce emissions from one of the top contributors to pollution in cities.

The government plans to implement the new standards for vehicles produced over five years through March 2032, with fuel consumption standards getting progressively more stringent every year, according to a draft notification from the power ministry.

Rules will be finalised after feedback from public. The supply disruptions caused by the war in Iran have given a fresh impetus to reduce dependence on crude imports, that meet about 90% of India’s oil needs.

The conflict has exposed the country’s vulnerability due to the heavy dependence on supplies from the Middle East.

Almost all of the petrol and most of the diesel consumed in the country goes into automobiles, government data showed.

The rules are “expected to improve the average fuel efficiency of passenger vehicles, resulting in lower fuel consumption, reduced dependence on imported crude oil, enhanced energy security, and a lower oil import bill,” the ministry said in the draft.

Vehicles also account for nearly 14% of greenhouse gas emissions in the world’s third biggest polluter, making cleaner passenger vehicles a key part of India’s goal of reaching net-zero emissions by 2070.

Tailpipe pollutants’ share in annual fine particulate matter impurities in air is as high as 40% in cities such as New Delhi.

The revised framework, that builds on norms introduced in 2017, requires automakers to progressively lower fleet-average carbon dioxide emissions, the metric used to determine fuel consumption.

Manufacturers would receive credits for sales of cleaner vehicles, including electric, ethanol, compressed natural gas and flex-fuel models, as well as for technologies that improve efficiency.

The plan includes a tradable credit mechanism. Automakers exceeding their targets would be able to sell credits to manufacturers falling short. — Bloomberg

Follow us on our official WhatsApp channel for breaking news alerts and key updates!

Next In Business News

Wall St set to open higher as chips recover, megacap earnings loom
Palm climbs to near one-month high as Iran conflict boosts crude
MUI Properties disposes of land for RM18.73mil
LSH Capital proposes listing transfer to Main Market
BYD Sime Motors launches first BYD-certified outlet in the Asia Pacific
ECM Libra secures banking facilities of up to RM130mil for hotel project
AmBank, Ramssol launch Pay Day Now platform for earned wage access
Ringgit ends higher against US dollar on robust economic data
Impact Capital inks MoU with China's KeenData to advance AI, data software adoption in Malaysia
Sunway-led JV wins S$2.13bil Singapore land tender

Others Also Read