Studies in the past have indicated that fluctuating petroleum prices and had impact on the world economy. Wars have been fought on account of this. Not only has the usage of petroleum products affected the economy but also impacted the natural environment. The automobile sector worldwide has, had a series of ups and downs and its fortunes have fluctuated mainly due to oil prices and government policies. In India also, the automobile sector is regulated by the Industrial policy and as such by taxes and duties imposed by the government on fuel and vehicles. The danger of environmental neglect has forced governments worldwide to look for more suitable alternatives to fossil fuels. Although India has started late compared to other nations, the government has geared itself by imposing taxes and duties on petrol and diesel vehicles while providing subsidies to electric and hybrid vehicles. A new section 80EEB in Income Tax Act has be introduced in India to encourage individuals to purchase electric vehicles through loans and avail deductions. Heading towards embracing eco-friendly, non-toxic, biodegradable vehicles and diminishing pollution. Though electric vehicle technology is at a nascent stage in India, definitely sees a long and bright future in environment friendly urban transportation by offering the best value and highest quality electric vehicles for city mobility. As a result, development of electric vehicles has gained acceptance worldwide. This study seeks to study the impact that, various legislations have on the automobile sector in India and its effects on the environment at large.

KEYWORDS:  Auto Mobile Sector, Electric and Hybrid Vehicle, Crude Oil, Fuel Price, Section 80EEB.