Shares of auto makers advanced after Union Minister Nitin Gadkari said the government has no intentions of banning the production or stopping the existing petrol and diesel-fuelled vehicles.
The S&P BSE Auto index was up 1.76% to 15,508.35. The S&P BSE Sensex was down 90 points or 0.24% to 36,635.22.
Tata Motors (up 5.35%), TVS Motor Company (up 2.28%), Mahindra & Mahindra (up 2.18%), Escorts (up 2.04%), Maruti Suzuki India (up 1.87%), Bajaj Auto (up 1.35%), Ashok Leyland (up 1.04%), Hero MotoCorp (up 0.89%) and Eicher Motors (up 0.51%) advanced.
Nitin Gadkari, Minister of Road Transport and Highways of India, attended the Society of Indian Automobile Manufacturers (SIAM) annual convention. The minister said the government was well aware of the contribution that India's automobile industry was making to the country's exports and employment.
He added that the auto industry has sought a relaxation of GST on vehicles due to the extra cost incurred for the transition from BS-IV to BS-VI compliant engine. He said that he will convey this to finance minister Nirmala Sitharaman and the government may consider the reduction of GST temporarily.
Gadkari, however, highlighted three major challenges import of crude, pollution and road accident the government is currently facing with the automobile sector.
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