India has the highest number of road accident fatalities in the world, with a significant number involving two wheelers. In 2022, around 75,000 fatalities were due to accidents involving two wheelers. To tackle this problem, the Ministry of Road Transport and Highways (MORTH) is planning to make ABS mandatory for all bikes and scooters. This new rule is expected to come into force from January 2026. Let’s check out the details.

As of now, ABS (single channel ABS) is mandatory for all two wheelers with engine capacity of 125cc and above. This rule can also be applied based on power output of 11 kW (approx. 15 hp) or more. Any two-wheeler with a power-to-weight ratio of 0.1 kW/kg or more should also be equipped with ABS.

For two-wheelers below 125cc, a combi braking system (CBS) has been mandated. These entry-level models constitute the majority of two-wheeler sales in the country. While a CBS setup has its benefits, safety can be more robust with ABS. Studies have shown that ABS can reduce two-wheeler accidents by up to 33%. That means a significant reduction in fatalities and injuries linked to accidents involving two-wheelers.

Data available with the government reveals that a significant number of accidents involving two-wheelers are caused due to brake-related skidding. That’s where ABS can play its role and prevent injuries and fatalities. Especially when the ABS is made mandatory for all bikes and scooters in the country.

It is likely that single-channel ABS will be made mandatory for all 2-wheelers in the country. In that case, the cost of entry-level bikes and scooters can see an increase of around Rs 6,000 to Rs 10,000. However, with large volumes, OEMs may be able to reduce the ABS upgrade cost per unit. Best Selling 2-wheelers under 125cc include the likes of Hero Splendor, Honda Shine 100, HF Deluxe, Honda Activa, TVS Jupiter, TVS XL and Honda Dio.

It remains to be seen if the government takes some steps to prevent a price shock in the entry-level commuter segment. Current GST rate of 28% can probably be relaxed to compensate for the cost of ABS upgrade to some extent. Industry leaders like Rajiv Bajaj have often been critical of the 28% GST rate on entry-level commuter bikes. A GST rate of around 12% to 18% can make commuter bikes more accessible.

MORTH is also planning to make two BIS-certified helmets mandatory with every new two-wheeler sold. One for the rider and one for the pillion. This again is a decision based on road accident data. A significant percentage of fatalities involving two-wheeler accidents is due to head injuries.

However, this helmet rule will further increase the cost of commuter bikes. While the intent is good, the government shouldn’t ignore practical necessities of lower-income groups and budget-conscious buyers. Reducing GST further from current 28% slab, might help buyers absorb the increase in price with the two mandated helmets, when it comes into effect.