The Centre’s recently approved ₹9,585-crore ‘Naya Safar’ scheme, aimed at replacing more than two lakh ageing and highly polluting commercial vehicles in the Delhi-NCR region, has raised concerns among domestic truck and bus manufacturers that the absence of localisation norms could open the door to cheaper imported vehicles, particularly from China, and dilute gains made under the Make in India programme.
While manufacturers have welcomed the scheme’s objective of accelerating the retirement of old diesel vehicles and improving air quality in the National Capital Region, they question why Naya Safar departs from existing programmes such as PM E-Drive and PM e-Bus Sewa, which mandate minimum domestic value addition and localisation requirements.
Fears of Cheap Imports
“The government spent years pushing the industry towards localisation. Companies responded by investing thousands of crores in manufacturing facilities, supplier ecosystems and domestic value addition. Without localisation requirements, imported vehicles can compete at significantly lower costs than manufacturers that have complied with existing schemes,” said a senior executive at a leading commercial vehicle maker.
Another executive at a leading OEM said that, without localisation requirements, large conglomerates such as JSW and Adani along with several startups—who have already entered the commercial vehicle segment—could partner with Chinese manufacturers and deploy imported vehicles, bypassing the investments in manufacturing facilities, supplier networks and workforce development that existing players have built over the years.
He added that even established manufacturers with significant localisation investments may be forced to consider cheaper imports from China to stay competitive, potentially reversing gains made over the past decade in building domestic manufacturing capacity.
Companies such as Tata Motors, Ashok Leyland, Montra Electric (Murugappa Group), VE Commercial Vehicles (VECV), JBM Auto, PMI Electro, Olectra, EKA Mobility, etc currently supply vehicles under government schemes that include localisation requirements.
Sector experts have also questioned the rationale for dropping localisation norms, arguing that industry players have already demonstrated compliance under existing programmes.
“Localisation and domestic manufacturing are critical for the long-term sustainability and competitiveness of India’s clean mobility sector. Therefore, it is important that new schemes retain, at a minimum, the localisation requirements established under existing programmes to support continued investment in domestic manufacturing capabilities,” said Amit Bhatt, Managing Director–India at the International Council on Clean Transportation (ICCT).
He added that greater convergence across government schemes can significantly amplify their impact. While coordination can be led by the respective line ministries, institutions such as NITI Aayog are also well positioned to ensure alignment across initiatives spanning multiple ministries and sectors, Bhatt said.
The PM E-Drive scheme is implemented by the Ministry of Heavy Industries, PM e-Bus Sewa by the Ministry of Housing and Urban Affairs, while Naya Safar scheme fall under the Ministry of Road Transport and Highways (MoRTH) and the Ministry of Petroleum and Natural Gas (MoPNG).
Industry executives argue that with around 2.07 lakh commercial vehicles—including 1.91 lakh trucks and 16,329 buses—operating across Delhi, Haryana, Rajasthan and Uttar Pradesh, the scheme could become a major driver of domestic manufacturing, investment and jobs if localisation requirements are included.
8% Discount Mandate
Another concern relates to the scheme’s mandate requiring OEMs to offer an 8% discount on vehicle prices.
Sector experts say verifying compliance could be difficult since truck and bus prices are not publicly available like passenger vehicles. They warn manufacturers could raise base prices and then offer notional discounts.
A government official who has worked on the scheme said OEMs can increase their ex-factory price but such revision must apply nationally and cannot be restricted to Delhi-NCR sales. If they only do it for NCR they will be disqualified.
Another sector expert said that if demand is concentrated in NCR, OEMs could raise prices across markets, adjusting ex-showroom rates elsewhere and effectively offsetting the discount due to limited pricing transparency.
