India’s top court extended a ban on registration of new large diesel-powered vehicles in New Delhi to curb pollution, dealing a blow to automakers such as Daimler AG’s Mercedes-Benz and Toyota Motor Corp.

The prohibition, imposed in December, will continue until the next hearing on May 9, said Gopal Subramaniam, a lawyer appearing for Mercedes Benz India. The bench headed by Chief Justice T.S. Thakur allowed the Delhi Police to register their vehicles on payment of a green cess of 30 percent, which has been opposed by carmakers.

"The ban will continue until May 9, which is the next date of hearing after private vehicle companies insisted that the levy is very high," Subramaniam said by phone.

The ban on the registration of new diesel cars and sport utility vehicles with engines of two liters or more was imposed to clean up the foul air blanketing the national capital. The decision comes on the last day of the second fortnight-long restriction in New Delhi on cars based on license plates.

The curb has reduced sales of some automakers and prompted introduction of models with gasoline options or smaller diesel engines. Toyota Motor Corp. has said its India sales, which dropped 41 percent in March, have been affected in the past few months in the national capital. New Delhi accounts for about 7 percent of local passenger car sales.

The extension of the ban comes after the government imposed fresh levies in its annual budget for the current fiscal year. The additional charges and the ban has prompted the automakers’ group to lower its earlier forecast for sales in the 12 months through March.

New Delhi’s toxic air rivals even Beijing. Levels of PM2.5 -- tiny, toxic particles that lead to respiratory diseases -- often soar above World Health Organization safe limits. Car fumes, smoke-stack power plants and fires lit to clear crops or for domestic use are often blamed.

Source:
courtesy of BLOOMBERG

by Pratap Patnaik

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