Nomura Study Recommends India to Ease Emission Norms for Small Cars Amid Global Cost Trends
Vizzve Finance | Auto & Environment Desk
A new study by global financial firm Nomura has recommended that India relax its strict emission norms for small and affordable cars, citing similar global trends and the growing cost burden on budget-conscious consumers.
India, which has been tightening its auto emission norms in line with global environmental standards, may need to reconsider the cost-benefit equation, especially in the small car segment — crucial for first-time and middle-income buyers.
What the Nomura Report Highlights:
Global Shift: Many countries, including those in the EU, have started reassessing environmental regulations that disproportionately impact entry-level vehicles.
Cost Escalation: Compliance with Bharat Stage VI norms and potential upcoming stricter guidelines (such as RDE norms) raise production costs, making small cars less viable for manufacturers.
Impact on Demand: Higher prices have already led to slowing demand for compact and mini cars in India. The segment’s share in overall auto sales has dipped from 47% (a decade ago) to around 31%.
Policy Recalibration Needed: Nomura suggests India needs a pragmatic policy approach balancing environmental needs with affordability and mobility access.
Why This Matters:
India has been aggressively pushing for clean mobility and has set ambitious goals for EV adoption. However, stringent emission norms without economic viability checks may end up shrinking access to private mobility for the middle and lower-income groups.
While EVs are a long-term solution, affordable petrol-driven small cars remain crucial in the near term. Nomura’s insights point towards a realignment of policies that also consider consumer economics and industry sustainability.
📈 Vizzve Finance Insight:
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FAQ
Q1. Why is Nomura recommending a relaxation in emission norms for small cars in India?
Nomura cites global trends and economic pressures that make it difficult for automakers to continue producing affordable small cars under strict emissions regulations. This could limit mobility options for lower-income buyers.
Q2. Are other countries also relaxing such environmental norms?
Yes, several countries are reassessing strict emission regulations for smaller cars, particularly in the face of declining sales and the rising cost of compliance.
Q3. How will this affect India’s EV goals?
The recommendation doesn’t oppose EV growth but suggests that a phased and inclusive approach is necessary, especially when full EV infrastructure and affordability are still evolving.
Q4. What does this mean for consumers?
If implemented, relaxed norms could help bring back affordable petrol-driven small cars, ensuring better access to private mobility for India’s middle class.
Q5. Is this recommendation binding on the Indian government?
No. The study by Nomura is advisory and analytical in nature. However, it could influence policy debate and regulatory directions.
Published on:July 4,2025
Published by :Selvi
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