India’s decision to more than double the import duty on platinum is expected to raise the cost of emission-control systems used in cleaner internal combustion vehicles, with the biggest impact likely on diesel SUVs and strong hybrid cars that use higher quantities of the metal in their catalytic converters. Industry observers estimate that if automakers pass on the higher costs, mid-size diesel SUVs could see price increases of ₹8,000–12,000, while strong hybrid models may cost ₹12,000–18,000 more.
India’s decision to more than double the effective import duty on platinum to 15.4 per cent from 6.4 per cent is set to ripple through the automotive supply chain, raising the cost of cleaner internal combustion vehicles and putting the heaviest pressure on diesel trucks, SUVs and strong hybrids that use larger quantities of the precious metal in their catalytic converters.
Industry observers estimate the impact could translate into showroom price increases of about ₹2,500–4,000 for entry-level petrol cars, ₹8,000–12,000 for mid-size diesel SUVs, and ₹12,000–18,000 for strong hybrid models as automakers pass on higher emission-compliance costs.
The duty hike, part of a broader increase in taxes on precious metals aimed at curbing non-essential imports and conserving foreign exchange amid the ongoing West Asia crisis, affects a metal that is critical to catalytic converters used to meet BS-VI emission standards.
Industry estimates suggest entry-level petrol cars typically use about 2–4 grams of platinum-group metals in their emission-control systems, compared with 6–10 grams in mid-size diesel SUVs, 10–15 grams in strong hybrids and 20 grams or more in heavy commercial vehicles.
“The duty hike essentially raises the cost of emission compliance,” said Randheer Singh, Founder of ForeSee Advisors and former Director, Electric Mobility, at NITI Aayog.
IGCR relief, but costs still rise
Platinum and palladium imported specifically for catalytic converter manufacturing continue to attract a concessional 7.5 per cent basic customs duty under the Import of Goods at Concessional Rate (IGCR) scheme.
However, industry executives said the higher benchmark duty could still increase spot prices, hedging costs and working capital requirements for suppliers and automakers.
Most emission-system contracts include commodity pass-through clauses, meaning Tier-1 suppliers such as Bosch, Sharda Motor Industries, and Tenneco typically bill automakers for prevailing precious metal costs rather than absorbing them.
Diesel and hybrid makers most exposed
Commercial vehicle manufacturers such as Tata Motors and Ashok Leyland are expected to be among the most affected, as heavy-duty diesel engines require larger amounts of platinum in diesel oxidation catalysts and particulate filters.
Mahindra & Mahindra may also face higher input costs across diesel-heavy models such as the Scorpio-N, Thar and XUV700.
The move could also disproportionately affect strong hybrid vehicles sold by Toyota Kirloskar Motor and Maruti Suzuki, whose catalytic converters use higher concentrations of precious metals to handle frequent engine restarts.
“The impact will be most visible in commercial vehicles, diesel SUVs and strong hybrids, where precious metal loading is higher,” Singh said.
Price hikes and recycling push
Analysts expect automakers to pass on at least part of the increase through selective vehicle price hikes, while also accelerating efforts to reduce the use of precious metals and expand recycling.
The notification also provides a concessional 4.35 per cent duty on spent catalysts imported for recovery and recycling, improving the economics of extracting platinum from end-of-life vehicles.
“The lower duty on spent catalysts strengthens the business case for recovering platinum through recycling and urban mining,” Singh said.
Analysts added that the increase could marginally improve the relative cost competitiveness of battery electric vehicles, which do not require catalytic converters, while also highlighting platinum’s growing strategic importance in hydrogen fuel cells and electrolysers.
BusinessLine has sought comments from leading automakers and component manufacturers on the potential impact of the duty hike; responses were awaited at the time of publication.
Published on May 13, 2026