Tata, Hyundai, Mahindra, MG want govt to review emission concession seen benefiting ‘only one’ carmaker

Major carmakers including Tata Motors, Hyundai, Mahindra & Mahindra, and JSW MG Motor have reportedly jointly appealed to the Indian government to withdraw a planned weight-based emission concession for small cars. They argue this policy would primarily benefit just one manufacturer and risk compromising broader industry and environmental objectives. 

In letters reviewed by Reuters, these firms did not name the intended beneficiary in their correspondence, but industry data and statements from three automotive executives indicate that Maruti Suzuki stands to gain the most from the proposal. Maruti, the largest small car seller in India, told Reuters that global markets such as Europe, the United States, China, Korea, and Japan maintain some provisions in their emission regulations to protect "very small cars".

The government’s new draft rules propose a relaxation for petrol cars weighing 909 kg or less, under four metres in length, and with engines not exceeding 1200 cc, citing "limited potential for efficiency improvements". This proposal has led to a clear division between India’s electric vehicle-focused companies and Maruti, delaying the finalisation of the crucial regulatory updates that would influence future vehicle line-ups and powertrain investment across the sector.

Under current Corporate Average Fuel Efficiency norms, India’s permissible carbon dioxide emissions apply to all passenger vehicles weighing under 3,500 kg. The proposed update would tighten average CO2 emissions to 91.7 grams/km, down from 113 grams/km, making it harder for small cars to comply than larger SUVs. This would also push manufacturers towards selling more electric vehicles to remain compliant.

Three company executives told Reuters the 909 kg threshold was arbitrary and not based on any international standards. They alleged the rule would favour Maruti Suzuki exclusively. JSW MG Motor highlighted in its letter that "over 95% of cars under 909 kg come from a single carmaker”, without naming anyone. Another letter by JSW MG Motor’s to the road transport ministry dated November 21 read: "A relaxation restricted to this weight band would disproportionately benefit one manufacturer." 

Hyundai, in its statement to Reuters, warned that "abrupt policy changes favouring a specific segment risk undermining industry stability and customer interests, as future investments and technology rollouts are planned on the basis of established norms." The company also told the industries ministry the exemption could be "perceived internationally as a step backward, at a time when global markets are converging toward stricter fuel-efficiency and zero-emission standards."

Mahindra, in a letter to India’s power ministry, requested omitting any "special category" or definitions based on size or weight, warning that this could have adverse effects in terms of the nation's progress towards safer, cleaner cars, and can alter the level playing field for industry players.

Maruti, defending the need for the concession, stated that small cars "consume much less fuel and emit less carbon dioxide than bigger cars, so having this 'safeguard' will help both CO₂ reduction and fuel saving." The company reported that about 16 per cent of its Indian sales are vehicles weighing less than 909 kg, although demand in that segment has declined as buyers opt for larger SUVs.