The auto industry with a total size of around Rs 6,00,000 crore contribute almost half of the manufacturing GDP of the country and employs more than 31 million people directly and indirectly.
A day ahead of the Supreme Court hearing on ban on big engine diesel cars and SUVs in Delhi NCR, auto industry body today said such restriction is not going to achieve the desired objective of reducing pollution and will only vilify diesel technology.
The Society of Indian Automobile Manufacturers (SIAM) also said due to uncertainty arising out of the ban on diesel cars and SUVs of 2,000 cc and above engines, many MNCs have decided to freeze further investments in India until complete clarity is achieved on key policy issues.
"Ban on diesel vehicle is not going to achieve the desired objective of reducing pollution, but will vilify diesel technology which has gone through a major transformation over the last 15 years and today is highly clean, as well as energy efficient," said a SIAM statement.
A ban on BS IV diesel cars legally encourages old and highly polluting vehicles not meeting the current emission norms, to continue on the roads, while not allowing new vehicles compliant with current emission norms to be used, it added.
"This is contrary to the objective of the ban. It also gives an impression that there is no stability or predictability in the policy regime which will deeply dent the country's global image as an investment destination and the 'Make in India' priority," the auto industry body said.
Highlighting the implications of such decisions, SIAM said: "Many auto MNCs have already taken a decision to freeze further investments in India until complete clarity is achieved on key policy issues which can have a bearing on their business prospects in India."
The auto industry with a total size of around Rs 6,00,000 crore contribute almost half of the manufacturing GDP of the country and employs more than 31 million people directly and indirectly.
According to Government's Automotive Mission Plan (AMP), the auto industry has the potential to employ a further 65 million persons in the next 10 years.
"The task before government now is to arrive at a unified stand on major policy issues like the diesel case and clarify the policy to the Courts, as well as globally," SIAM said.
It added that all diesel cars being manufactured today are compliant to the current emission norms set by Government of India and compliant vehicles can never be considered as "polluting", and the 'polluter pays' principle cannot be applied, unless there is a violation of the notified emission norms.
"The automotive industry has made significant investments in diesel technology which are in accordance with the investment policies of government. As such, putting any restrictions or bans on a legally compliant industry tantamount to an infringement of the fundamental right to do business in the country," SIAM said.