India minister to propose higher diesel vehicle tax, warns automakers

NEW DELHI -- India's road transport minister, Nitin Gadkari, on Tuesday said he will propose an additional 10% tax on diesel vehicles and warned automakers of even higher levies to cripple their ability to sell such high-polluting vehicles. Gadkari made the comments at a New Delhi automakers conference where executives of Tata Motors, Mahindra and Mahindra, Maruti Suzuki and foreign car companies such as Mercedes and Volkswagen were gathered. Gadkari said he will later in the day ask the finance minister for an "additional 10%" goods and services tax on diesel vehicles to tackle problems related to pollution. The Indian government currently imposes a 28% tax on diesel cars and an additional so-called "cess" is levied depending on the vehicles' engine capacity. Shares in Indian automakers Tata Motors, Mahindra and Mahindra, Ashok Leyland, and Eicher Motors fell between 1.5% and 4.5%.