Over a year ago, on 01 April 2020, India took a historic step in vehicle
technology. BS-VI emission standards were implemented across the country,
leapfrogging from BS-IV. The move put India on par with global emission
standards for the first time, opening up more opportunities worldwide. The move
also paves the way to cleaner technologies in the future, eventually leading
towards electric mobility.
However, the jump from BS-IV to BS-VI created some challenges. R&D
had to be ramped up by companies, requiring additional investments.
Manufacturing had to be realigned to suit the new norms.
The biggest challenge, however, was brought upon by the pandemic.
Despite all the preparation, the country was in a historic lockdown in April
2020, when the BS-VI norms came into vogue. Let’s take a look at the journey
The Indian automotive industry has come a
long way in adopting the emission norms announced over the years. They
journeyed from tailpipe emissions in vehicles to the Bharat Stage I (BS-I)
emission standards in 2000. From there, we saw incremental strictness in the
emission standards as we moved to BS-II. BS-III, and BS-IV.
In 2016, when India signed the Paris Climate Agreement, India committed
to bringing down the carbon footprint by 33--55% (from 2005 levels) in the
following 12 years. Thus, leading to a monumental decision to skip BS-V and
transform directly to BS-VI.
This required a considerable realignment within the automotive
companies. But the industry has done a commendable job in making the necessary
upgrades to meet the deadline. In addition, the Indian automotive sector has
ramped up its investment in new technologies and is looking to partner with
more local manufacturing partners to be cost-effective.
The implementation of BS-VI norms has not only had an impact on the OEMs
but also on auto-component manufacturers - both local and international.
Local manufacturers had to invest in R&D or acquire technologies and
ramp up production capabilities to move up the value chains. On the other hand,
multinational manufacturers had to develop a solution for the Indian market - a
unique and value-conscious market.
Understanding the Indian consumer behavior and buying patterns over the
years, it is essential to understand the cost dynamics. In addition, the
vehicle needs to undergo significant upgrading with significant changes in
engine design and after-treatment systems to comply with the stringent norms.
Auto-parts manufacturers had to create an economy of scale for low-cost emission
control systems and technologies for the value-conscious consumers of the
One of the most prominent challenges of BS-VI was that each variant had
to transform to meet the norm. This created a strain on supply chains for
Indian auto manufacturers.
The BS-VI emission standard has created the much-needed groundwork for
other policies to create a sustainable ecosystem. However, with the advanced
technologies and stricter emission norms in place, there is a need for an
upgraded infrastructure for newer technologies for the effective implementation
and desirable output.
This transformation has opened the doors
for innovation. OEMs are now equipped to be innovators in battery technology
and valve trains for friction reduction, flexibility, and advanced combustion
technologies. Further, many OEMs have already embarked on the journey towards
electrification to create the right hybrid product mix for the Indian market.
With the current market conditions and consumer behavior, the norms have
paved the way for the adoption of electric vehicles in India. Mild hybrid
technology is expected to take the Indian automotive industry by storm with its
unique value proposition in helping OEMs comply with fuel economy standards and
more sustainable solutions.
Various notable OEMs focus on MHEVs to improve fuel efficiency and make cars
more affordable for their consumers. This will have an affirmative effect not
only on the environment but also help in reviving the economy. Moreover, as the
government targets to put at least 30% of electric vehicles on the road by
2030, the BS-VI norm will help enormously.
Although the Faster Adoption and Manufacturing (FAME 2) program of hybrid and
electric vehicles has provided policy stability needed for the sector,
achieving the ambitious central government goals still require some state
government-backed programs and appropriate incentives.
The recently announced Vehicle Scrappage policy that aims at improving
the air quality also compliments the BS-VI. As the old vehicles will be taken
off the road, it will create demand for new BS-VI vehicles.
The Government is also looking at sustainable alternative transportation
fuel (e.g. Ethanol) to reduce its dependence on crude. This will give OEMs and
auto-parts makers more opportunities to explore solutions that comply with
BS-VI emission standards.
The jump from BS-IV to BS-VI emission standards was crucial and needed
to be leveraged to create a sustainable ecosystem. ICE vehicles will remain a
part of the Indian OEMs for the foreseeable future. However, electrification
and alternate fuels have received a much-needed push with the introduction of
the norm, electrification, and alternate fuels. We can already see increased
hybrid offerings in the market.
Having said that, we also need to address some challenges. For example,
the cost of compliance in diesel engines will be higher due to the need for
expensive post-treatment technologies. On the other hand, the petrol engine can
use various technologies for better combustion, injection, and compliance to
make significant progress in fuel efficiency and power generation.
India is on the path to reach global emission standards, and it will
collaterally witness some changes in sales, consumer behavior in the automotive
industry. However, to make the BS-VI transformation successful in the true
sense, India needs significant structural reforms to identify manufacturing,
urbanization, and sustainability opportunities to achieve the required employment
and productivity growth in the country in the coming years.
Anurag Garg is
the Managing Director & Country Head of Vitesco Technologies in India. He
comes with over 32 years of experience in the Industrial & automotive