India’s Supreme Court has banned the sale of vehicles that comply with the Bharat Stage (BS) 3 emission standards in the country, which is similar to the Euro 3 emission standards put in place in most European countries between 2000 and 2005. Petrol engined passenger cars in Malaysia currently most conform to minimum Euro 2 standards (some models are higher).

In the report by Reuters, the court, in its judgment which is already in effect since April 1, said health concerns of citizens took precedence over any financial losses for companies.

The country had announced back in 2015 that carmakers must manufacture only Euro 4-compliant vehicles from April 1, 2017 as they produce less pollution. However, at that time, it did not propose a sales ban of Euro 3-compliant vehicles on the very same day. Currently BS 4-compliant (or Euro 4-compliant) vehicles are sold in select states in India.

The unexpected and unprecedented move has resulted in a sharp fall in share prices of major carmakers in the country, with shares of two-wheeler manufacturer Hero MotoCorp down by 4.4%, while truck manufacturer Ashok Leyland was down 6.6% and carmaker Tata Motors’ shares dropped nearly 2%.

This is due to the vast numbers of unsold inventories, with Mumbai-based brokerage firm Angel Broking claiming more than 800,000 BS III-compliant vehicles are affected, worth about 120 billion rupees (RM8,188,419,450). “Days before the deadline, they said you cannot sell. I don’t think this much inventory can be sold off in the next couple of days,” said Vinod Dasari, president of the Society of Indian Automobile Manufacturers (SIAM) and managing director of Ashok Leyland.