The proposed emission standards (BS-VI) will push vehicle prices upwards with diesel segment likely to witness sizeable cost increase due to introduction of additional components. This would make diesel passenger vehicles costlier (vis-a-vis petrol variants) and consequently may deter demand for diesel vehicles, rating agency Icra said in a report on Monday.

Original Equipment Manufacturers (OEMs) with higher dependence on diesel models may accelerate their focus on petrol segment, while hybrids and other clean technologies would take centre stage in their R&D plans. This would make diesel passenger vehicles costlier (vis-a-vis petrol variants) and consequently may deter demand for diesel vehicles, Icra said.

The Union government in February this year decided to leapfrog the Bharat Stage-V (BS-V) emission standards and directly move to more stringent BS-VI norms by April 2020, four years ahead of the earlier schedule.

“It is believed while availability of technology is not an issue, the key challenge for OEMs will be adapting the available solutions to Indian market conditions in a relatively short time frame, in a cost-effective manner. Further, given the past experience with respect to delays in availability of BS-IV compliant fuel, the availability of cleaner fuel by 2020 on nationwide basis may also become a bottleneck,” Icra said.