Karnataka: Pralhad Joshi fears taxes on EVs will derail India

• ETtech

• Published On Apr 4, 2026 at 01:09 PM IST

Union Minister Pralhad Joshi has warned Karnataka’s decision to end electric vehicle road tax exemptions. He stated this move could increase India’s crude oil imports and hinder climate targets.

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Union Minister for New and Renewable Energy Pralhad Joshi on Friday cautioned that Karnataka’s move to withdraw road tax exemptions for electric vehicles (EVs) could raise India’s crude import bill, encourage a shift back to fossil-fuel vehicles and derail climate targets.

In a video message posted on X, Joshi said the state government’s decision-aimed at mopping up about ₹250 crore-was “insignificant” relative to Karnataka’s ₹3.5 lakh crore budget, but could have disproportionate economic and environmental consequences. He argued that the policy reversal comes at a time when countries globally are incentivising clean mobility to cut emissions.

The comments follow the passage of the Karnataka Motor Vehicles Taxation (Amendment) Bill, 2026, which withdraws road tax exemptions on a range of EVs, including cars, jeeps and buses, while retaining the exemption for two-wheelers. The revised regime extends lifetime tax to most battery-operated vehicles, replacing the earlier threshold that applied only to vehicles priced above ₹25 lakh.

“The government must understand that such measures will push consumers back towards petrol and diesel vehicles, increasing pollution,” Joshi said, adding that India’s dependence on imported crude could worsen, especially amid rising global prices linked to geopolitical tensions in the Persian Gulf.

He further alleged that the move reflects an attempt to boost revenues from fuel consumption, as higher use of internal combustion engine vehicles would translate into increased tax collections on petrol and diesel.

Calling the decision “fiscally shortsighted,” Joshi said it points to stress in state finances and a lack of fiscal discipline, despite the broader national interest in promoting clean mobility.

Under the new structure, EVs priced below ₹10 lakh will attract a 5 per cent lifetime tax, those between ₹10 lakh and ₹25 lakh will be taxed at 8 per cent, and vehicles above ₹25 lakh will face a 10 per cent levy. For already registered vehicles, owners will be required to pay a proportion of the lifetime tax-ranging from 93 per cent for newer vehicles to 25 per cent for those older than 15 years, with rates tapering as vehicles age.

The levy will come into force once notified by the state government, following which Regional Transport Offices (RTOs) will begin collections after integrating the changes into their systems.