Overview
- Industry body SIAM estimates a one‑time impact of about ₹25,000 crore on FY26 profits, or roughly ₹9,000 crore on a discounted basis.
- The trigger is Rule 4(6) in the 2025 End‑of‑Life Vehicles rules, which auditors say activates Ind AS 37 to book costs for Extended Producer Responsibility, a policy that makes makers pay for end‑of‑life handling.
- Provisions would cover vehicles already sold, with look‑backs of up to 20 years for private vehicles and 15 years for commercial vehicles, according to executives cited in the reports.
- The environment ministry’s March 27, 2026 amendment left Rule 4(6) unchanged, and exact charges remain unclear because the CPCB has not yet notified the environmental compensation per vehicle.
- Automakers warn the required provisions would tie up cash and cut reported FY26 profits, with the burden split at about ₹14,623 crore for four‑wheeler makers and ₹9,650 crore for two‑ and three‑wheeler firms.