If you’ve been watching the Indian auto market, you’ve probably heard buzz about new car rules, tax changes, and big EV push. It can feel overwhelming, but the basics are simple. This guide breaks down the biggest policy moves right now and shows you what they mean whether you’re buying a new ride, selling cars, or just curious about the road ahead.
First up, taxes. The government recently tweaked the Goods and Services Tax (GST) on cars. Premium vehicles (over 20 lakh rupees) now face a GST rate of 28%, while midsize models sit at 18%. That means a Rs 1.2 crore SUV will cost more than before, but a compact hatchback barely feels the bump.
Import duties are another piece of the puzzle. For fully built imported cars, the duty remains at 100% plus a 30% cess on top. However, kits imported for local assembly (Completely Knocked Down – CKD) enjoy a reduced duty of 30% plus the cess. This policy encourages manufacturers to set up plants in India, which can lower prices for consumers over time.
India’s biggest policy splash in recent years is the focus on electric vehicles. Under the FAME II scheme, buyers can claim up to Rs 1.5 lakh in subsidies for eligible EVs, and manufacturers receive cash incentives for each unit they sell. The catch? The car must meet a battery cost cap of Rs 15,000 per kWh and an efficiency target of 6 km/kWh.
In addition to subsidies, many states are offering road tax waivers and registration fee cuts for EVs. For example, Delhi waives road tax for electric two‑wheelers and offers a 50% rebate on registration for electric four‑wheelers. These regional perks can shave thousands off the sticker price.
One more thing to watch: the new “Battery Swapping” policy encourages setting up swapping stations, which could make EVs more practical for long trips. If you’re thinking about an EV, check both central and state-level incentives – the total saving can be significant.
Emission standards are tightening too. The shift from BS‑VI to BS‑VII is on the horizon, with stricter limits on NOx and particulates. Manufacturers are already rolling out engines that meet these rules, so new cars will be cleaner and more fuel‑efficient.
What does all this mean for you? If you’re buying a car, look for models that qualify for the FAME II subsidy and check your state’s road‑tax policy. If you’re a dealer, understanding the duty structure can help you price imported models competitively. And if you’re a manufacturer, tapping into the CKD incentive can lower your production costs and speed up market entry.Bottom line: India’s car policy is moving fast, with taxes, duties, and EV incentives all aimed at boosting local production and cutting emissions. Stay updated, compare the numbers, and you’ll be able to make a smarter choice on the road ahead.
The 15-year car rule in India governs the lifespan of vehicles on the road, impacting car owners and the environment. This rule mandates the deregistration of vehicles older than 15 years, influencing the auto industry and urban planning. It's crucial for Indian car owners to understand how this regulation affects their vehicles and what steps to take when their car's expiration date approaches.
Read More© 2025. All rights reserved.