Auto shares such as Bajaj Auto fall after the Finance Ministry cuts the rebates paid on certain types of exports. Indian auto makers get refunded a portion of local taxes paid for components used in vehicles, motorcycles or auto parts that are sold overseas.
Nomura says the Finance Ministry notice has detailed reductions in the rebates of 2-5.5 percent.
Exports accounted for 36 percent of Bajaj Auto's total sales by quantity and 33 percent by revenue in the last financial year ended in March.
Bajaj Auto falls 1.8 percent, TVS Motors falls 1 percent while Ashok Leyland is down 0.8 percent.