Niti Aayog moots sops, extension of PLI to LNG vehicles

NEW DELHI: The Niti Aayog has proposed a host of fiscal and non-fiscal incentives, including extension of the production-linked incentive scheme to vehicles run on liquified natural gas and setting up a demand aggregator, to encourage use of LNG in medium and heavy commercial vehicles.

This will help lower carbon dioxide emissions and contribute towards the national goal of a gas-based economy by increasing the share of natural gas in the primary energy mix to 15% by 2030, the Aayog said in a report jointly prepared with the Netherlands embassy.

According to the Aayog, India's rapidly expanding trucking market, which is expected to more than quadruple from 4 million trucks in 2022 to roughly 17 million by 2050, offers immense scope for lowering emissions and encouraging investments for growth.


In the report titled 'LNG as a Transportation Fuel in Medium & Heavy Commercial Vehicle Segment', the government think tank suggested setting up a demand aggregator company for buying LNG trucks, similar to Energy Efficiency Services in the electric vehicle sector.

"This can generate initial demand for the LNG project and provide sustainability to the retail LNG outlets," it said.

The Aayog also called for reducing the value added tax on the sale of LNG to heavy duty vehicles to 5% (from 10% now) and bringing retail LNG price under the ambit of the 5% GST bracket.