The ongoing war between the US and Iran has impacted the procurement of 59 buses for the Uttarakhand government. Citing increased raw material costs, Tata Group refused to supply the buses at the previously finalised prices.
Officials from the Uttarakhand Transport Corporation stated that efforts by Tata Group and the state government to resolve the issue have not yet succeeded. “Tata Group has refused to supply the buses at old rates citing the ongoing war in the Gulf countries. Efforts are being made to resolve this issue as the bus procurement process has tp be completed by October,” said Kranti Singh, General Manager Operations of Uttarakhand Transport Corporation.
Of the 59 buses, 50 were ordered by the corporation following state cabinet approval of a proposal, while nine were part of an additional deal—owing to the reduced GST—with the 100 buses ordered a year ago.
Notably, UTC entered into a deal with Tata Group in July 2025 to purchase 100 buses. The Corporation also executed its purchase order (PO) in favour of Tata Group with an agreed cost of ₹35,35,000 per vehicle for 100 buses. The manufacturer also proposed to provide nine additional buses within the same budget of ₹35.35 crore (for a total of 100 buses) after the Centre reduced the GST from 28 to 18 per cent in September 2025.
“This happened because the price per bus was slashed by ₹2.77 lakh due to the reduction in GST by the centre after the corporation placed its procurement order. This resulted in surplus money left with Tata Group that could have covered the cost of nine more buses for the corporation.
In addition to the 100 buses ordered in 2025, the Pushkar Singh Dhami Cabinet recently approved a proposal to purchase 50 more buses for the hill areas at the cost of ₹32.58 lakh each. “However, as informed by corporation officials Tata Group has hiked the cost per vehicle to ₹36 lakh, citing the ongoing war in West Asia and the subsequent rise in raw material prices as the main cause. Consequently, the deal for the 59 buses is hanging in the balance,” said an officer on the condition of anonymity.
According to officials, as the deadline for delivering the 59 buses is approaching, the Corporation asked the supplier company to submit a written response regarding the issue raised as early as possible. Corporation is also considering other alternatives for acquiring buses if the price issue raised by the Tata Group is not resolved in time.