Almost every passenger vehicle OEM in India has announced a price hike of its vehicles between three and five percent starting January 2025. Even some commercial vehicle manufacturers have announced that they will hike the prices of their vehicles starting January 2025 owing to the increase in input costs, rise in operational expenses and inflation. 
While the annual inflation rate in India eased to 5.48 percent in November of 2024 from 6.21 percent in the previous month loosely in line with market expectations of 5.5 percent, according to a report by tradingeconomics.com, the increase in automobile prices by three to five percent is expected to dampen the market sentiment at least for the short term. 
If the spike in auto sales during the festive season provided a reason to cheer, the first half of the current fiscal saw many segments registering a slowdown in sales. The extent of this was also indicated by the automotive dealers’ body, the Federation Of Automotive Dealers Association rising in favour of its dealer members to urge automakers to adjust their production schedule in the wake of the inventory at dealers reaching an alarming level. 
The festive season helped to lower the inventory build up of vehicles to a certain extent. However, with the last quarter of this fiscal expected to be a sluggish period for auto sales as it traditionally is considered to be, the news of hike in GST on old and used vehicles from 12 percent to 18 percent is likely to cause some shake up in the used vehicle market that has seen better times in the recent few months as more and more aspiring motorists turn to used cars because of budget constraints and other factors. 
Despite the higher interest rate of above 13.5 percent in case of used vehicles as compared to the interest rate of between eight to 10 percent for new vehicles, the pull for them has been high in the recent times. This is likely to be affected if and when the GST Council’s fitment committee clears the proposal to change the GST on old and new vehicles with an engine capacity of no bigger than 1,200 cc and length of no more than four metre as mentioned above. Even electric vehicles that attract a GST of five percent when bought new will see the GST on them hiked to 18 percent from 12 percent if the proposal goes through. 
While the logic that the hike in GST on used and old vehicles will increase the sale of new small vehicles is hard to understand when applied against the fact that an entry-level vehicle like the Maruti Alto K10 today looks cost to buy at a price of INR 470,000 on-road Mumbai for the basic trim. Also, the sales of it have been steadily shrinking with a trend visible of a rising demand for SUVs. 
Even an entry-level SUV with Maruti S-Presso costs INR 499,000 on-road in Mumbai for the basic trim. The ones like Hyundai Exter or Renault Kiger costs INR 721,000 and INR 705,000 on-road in Mumbai for basic trim variant. 
With prices of vehicles in India claimed to have gone ‘over the roof’, not counting the hike in January 2025, a proposal to hike the GST on luxury automobiles to 35 percent is said to be under consideration. 
Against such a background it would be worth understanding the taxt structure on automobiles in the country to anticipate what an increase from 28 percent GST to 35 percent GST would entail. Passenger Vehicles (Petrol, CNG, LPG) measuring no longer than four metre in length and having an engine of no more than 1,200 cc are taxed at 28 percent. With a compensation cess of one percent, the total tax rate applied in 29 percent. 
Passenger vehicles (diesel) measuring no more than four metre in length and having an engine of no more than 1,200 cc are taxed at 28 percent. With a compensation cess of three percent, the applied rate is 31 percent. Passenger vehicles with an engine of no more than 1,500 cc are taxed at 28 percent. With compensation cess of 17 percent, the applied rate is 45 percent. 
Passenger vehicles with an engine of more than 1,500 cc are taxed at 28 percent. With compensation cess, the applied rate is 48 percent. SUVs that measure above four metre in length, having an engine of more than 1,500 cc and a ground clearance of more than 170 mm are taxed at 28 percent. With compensation cess of 22 percent, the applied rate is 50 percent. 
Hybrid vehicles measuring up to four metre and having an engine of no more than 1,200 cc are taxed at 28 percent. Hybrid vehicles measuring more than four metre in length and having an engine of more than 1,200 cc (petrol) and 1,500 cc (diesel) are taxed at 28 percent. With compensation cess of 15 percent, the applied rate is 43 percent. 
Public transport vehicles of between 10 and 13 seats are taxed at 28 percent. With compensation cess of 15 percent, the applied rate is 43 percent. In the case of buses above 13 seats and goods transport vehicles, the applier GST rate is 28 percent. 
In the case of two- and three-wheelers the GST is 28 percent. With a compensation cess of three percent on two-wheelers above 350 cc, the applied rate for them is 28 percent. Electric vehicles, on the other hand, attract a GST of five percent. For hydrogen vehicles it is 12 percent. 
Besides GST plus compensation cess, there are other State Government and Union Government taxes such as the road tax, 18 percent GST on insurance (an insurance of three years is applied on some class of vehicles including two-wheelers at the time of purchase), toll tax, tax on fuel etc that effective push the tax percentage for every vehicle bought to a considerably higher level. 
The talk of luxury vehicles – which whether one should assume would be premium two-wheelers above 350 cc; passenger vehicles that measure more than four metre and have an petrol engine of more than 1,200 cc and a diesel engine of more than 1,500 cc, and hybrid vehicles measuring more than four metre in length and having an engine of more than 1,200 cc in petrol and 1,500 cc in diesel – being pushed to the 35 percent GST slab that is under consideration may elevate the tax percentage in the price tag to well above 50 percent. This is without including the other taxes mentioned above. 
An article in the Telegraphindia.com dated 4 December 2024 reports that the proposal of the Group of Ministers (GoM) for 35 percent GST for sin goods that are currently taxed at 28 percent has created uncertainty regarding the taxation of automobiles as well. This is particularly the case because they are taxed on par with sin goods like cigarettes and aerated drinks.
While the GoM is only a recommending body and the GST Council the ‘actual deciding’ organisation, an early clarity on whether automobiles/vehicles will be separated from sin goods as they contribute to people’s mobility and the nation’s supply chain would help it looks like.   
As a slowdown continues based on inflation, rise in input prices and operational expenses, the news of increase in some segments of small old and used vehicles as well as the proposal to elevate GST on sin goods from 28 percent to 35 percent is creating new reason for some sectors to worry about. The effect of such occurrence on the economy and on the market is necessary to consider as automobiles have always been described as luxury goods and taxed on par with sin goods, said an industry observer.
The demand of the auto sector to reduce GST on automobiles has never been entertained, which further emphasises that automobiles – even a commuter scooter or a truck – are considered as luxury goods bordering on sin goods, he added. 
The move to tax a section of the new vehicles such as those with a petrol engine of more than 1,200 cc and a diesel engine with more than 1,500 cc to 35 percent is certain to have a profound effect on the auto industry which is being pushed to become a key manufacturing hub in the world. 
The jump through various regulations has already affected the prices of vehicles across the last decade or two. It has made it hard for some aspiring individuals and families to even afford entry-level passenger vehicles.  
India has 34 cars per 1,000 people whereas key automotive markets that are also the key manufacturing hubs have up to 594 cars per 1,000 people. For India to be a key automotive manufacturing hub like China, the observer said, it must first create a market at home where high quality vehicles are taxed such that a larger section of population can afford them, use them and be truly a part of the economic progress the country is achieving. 
The demand for large cars and congestion in many Indian cities makes a ripe case of small cars, small electric cars being used as city commuting machines over two-wheelers, he added. 
“Excessive taxation on sectors like housing and automobiles should not create a situation where the hen that lay golden eggs was killed to find a treasure trove of gold but what was found was just a lifeless body of her,” he signed off. 
 

Image for representative purpose only. 

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Birla Carbon is set to showcase its innovative Nanocyl range of multi-walled carbon nanotube solutions at NanoTech 2026 in Tokyo, Japan, held from 28 to 30 January. The company’s presence at Booth 3W-A11 highlights a commitment to providing advanced materials that enhance performance and sustainability for industries including automotive, electronics, energy storage and transportation. Through the Nanocyl brand, a global leader in MWCNTs, Birla Carbon offers formulations that improve material efficiency, enable significant cost optimisation and support energy savings.

A key focus will be the NC7000 MWCNT, recognised for its high electrical conductivity, superior processability and strong mechanical property retention. Its UV resistance and exceptional cleanliness make it suitable for demanding industrial and advanced applications. Beyond the base material, Birla Carbon will showcase specialised engineered formulations that address specific industry challenges. These include thermoplastic concentrates for conductive polymers, elastomer masterbatches for durable static control and epoxy-based systems that improve conductivity with processing flexibility. The portfolio also features eco-friendly aqueous dispersions and specialised solvent dispersions tailored for energy storage applications, responding to the growing demand for sustainable and efficient conductive solutions.

This participation underscores Birla Carbon’s dedication to innovation-led growth and its commitment to developing advanced materials that meet evolving market demands. Visitors are invited to explore how these MWCNT technologies can enable new possibilities and support future growth in their own projects.

Laurent Kosbach, CEO, Nanocyl, said, “Nanotechnology is a powerful enabler of material innovation. Through the Nanocyl range of carbon nanotubes, we are advancing material properties such as electrostatic discharge (ESD), electrical conductivity, mechanical reinforcement and thermal dissipation across a wide range of materials. Nanotech 2026 provides an important platform to engage with global partners and demonstrate how our engineered formulations are already delivering value across demanding industries.”

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Union Minister for Road Transport and Highways Nitin Gadkari has announced the return of the Sadak Suraksha Abhiyan (SSA) 2026. This campaign brings together figures from the film industry to address road safety through a public awareness initiative. The ministry will host a telethon on 25 January in Mumbai to mark the fourth year of the programme.

Notable participants joining the movement include Amitabh Bachchan, Alia Bhatt, Vicky Kaushal, Kay Kay Menon, Shankar Mahadevan and Swanand Kirkire. Data from the ministry shows that India recorded 487,707 road crashes in 2024, leading to 177,175 deaths. Figures indicate that adults between 18 and 45 years old represent over two-thirds of these fatalities.

The theme for SSA 2026 is 'Kartavya' (Duty), which frames road safety as a shared responsibility. The tagline for the initiative is ‘Parvaah Se, Kartavya Tak’. The 2026 edition operates on four pillars: Kartavya (Duty), Kayda (Discipline), Kavach (Shield) and Kranti (Change). These are intended to influence road user behaviour across the country.

Factors contributing to fatalities include overspeeding, rash driving, overtaking, jaywalking and the non-use of helmets and seatbelts. The campaign also highlights the failure to provide assistance during the golden hour. The initiative aims to use conversations and performances to encourage the public to follow road regulations.

The event is designed to move from awareness to action within the road ecosystem. The telethon will be broadcast on CNN-News18 on 25th January from 11:00 am onwards.

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Sue Bai, Chief Engineer at American Honda Motor Co., Inc., has been elected to the SAE International Board of Directors.

She serves as the Director at Large for the 2026-2027 term, Bai is the second representative from Honda to join the governing body. Her appointment follows a career focused on the research and deployment of mobility technologies.

Bai manages the Sustainability & Business Development unit at American Honda. Her previous experience includes leading data business for the Digital Service Development Division, where she analysed transportation data to assist road infrastructure and traffic environments. Since joining Honda R&D Americas in 2004, she has held leadership positions at the Honda Research Institute USA and the Automobile Technology Division.

Within SAE International, Bai has chaired technical committees for Vehicle-to-Everything (V2X) standards. These protocols aim to coordinate safety for vehicles, pedestrians and cyclists. She has also acted as the technical lead for industry-government projects, including the Ohio Smart Mobility Corridor, a test bed for connected safety systems.

SAE International is a global network that develops consensus standards and provides career development for engineers. Bai has been a member for nearly 20 years and has received honours including the SAE Top Contributor of the Year in 2021 and 2022, as well as the James M. Crawford Executive Standards Committee Outstanding Achievement Award.

Bai holds a Ph.D. in Industrial Engineering and a Master of Science in Electrical and Electronics Engineering from the University of Michigan. Her work has spanned Intelligent Transportation Systems (ITS) and automated vehicle research.

Sue Bai, said, “I’m honoured to be elected to the SAE International Board of Directors. SAE plays a vital role in bringing engineers together to solve complex mobility challenges, and I look forward to further contributing to work that advances knowledge and solutions for the benefit of society.”

The SAE Board of Directors oversees the organisation’s mission to connect members through standards and learning opportunities. Bai’s term will focus on the application of engineering knowledge to address mobility issues.

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GreenCell Mobility (GCM), the electric bus platform backed by Eversource Capital, has completed a USD 89 million mezzanine funding round. The investment was provided by the International Finance Corporation (IFC), British International Investment (BII) and Tata Capital. The capital is designated to support the expansion of GCM’s electric vehicle operations across India.

The company currently operates a fleet of more than 1,200 electric buses and 270 charging stations. This funding will facilitate the growth of the fleet to 3,700 units. The expansion includes buses secured through the National E-Bus Programme and the PM Seva E-Mobility initiative. These vehicles will serve routes in Delhi, Madhya Pradesh, Andhra Pradesh, Bihar and Puducherry.

The mezzanine financing structure is intended to catalyse private and institutional capital for the transport sector. By increasing the number of electric buses on intra-city and intercity corridors, GCM aims to address air quality and carbon emission targets. The project also focuses on establishing payment-security models and financing structures that can be replicated in urban transport markets.

GCM functions as an OEM-agnostic platform, allowing it to integrate various bus models into its network. The investment will also fund the development of charging infrastructure required to support the larger fleet, specifically targeting connectivity in tier-2 and tier-3 cities.

Dhanpal Jhaveri, Vice-Chairman of Everstone Group and CEO of Eversource Capital, said, "Through this funding round for GreenCell Mobility, we are deepening our partnership with IFC, BII and Tata Capital (leaders in sustainable investments). The transaction exemplifies the catalytic role that private, development and institutional capital can play in accelerating India’s clean transport revolution. GCM’s expanded operations will drive transformation efficient transportation to cities and commuters while delivering returns."

Devndra Chawla, Managing Director & CEO, GreenCell Mobility, said, "This fundraise marks a significant milestone in GreenCell Mobility’s journey to build electric mobility as a mainstream, scalable public transport solution for India. The participation of IFC, BII and Tata Capital reflects strong conviction in our platform, our operating model, and our ability to execute at scale. As we expand our fleet and charging infrastructure across states under programmes such as PM Seva E-Mobility, our focus remains on delivering reliable, cost-efficient and zero-emission transport for cities and intercity corridors."

Katherine Koh, Regional Industry Manager, IFC, added, “Electrifying buses is central to India’s urban transformation agenda, and our mezzanine investment in GreenCell will accelerate the rollout of sustainable public transport for thousands of people across India’s tier-2 and tier-3 cities. It will create jobs while catalyzing private capital through innovative financing and payment-security models.”

Shilpa Kumar, Managing Director and Head of India, BII, said, “Climate action is a key priority for BII in India, with electric mobility as a key pillar of our climate investment strategy. Electric buses are a critical lever for decarbonising public transport at scale. Our investment in GreenCell Mobility reflects our commitment to supporting proven platforms that accelerate clean mobility.”

Manish Chourasia, Chief Operating Officer, Tata Capital, noted, "Tata Capital is pleased to participate in this strategic investment that accelerates India’s transition to cleaner, more efficient transport. GCM’s innovative approach aligns with our vision for sustainable urban development and inclusive growth.”

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