NEW DELHI, Oct 23 Reuters Japan39;s Toyota Motor is lobbying the Indian government to cut taxes on hybrid vehicles by as much as onefifth, arguing they are far less polluting than petrol cars but do not get commensurate policy treatment, a company letter shows.

The world39;s largest carmaker plans to expand production capacity to meet a surge in Indian demand for hybrids, but Prime Minister Narendra Modi39;s government has focussed on pushing sales of electric vehicles EVs, offering companies millions of dollars in incentives to build EVs and batteries.

India taxes EVs at just 5, while the levy on hybrids is as high as 43, just below the 48 imposed on petrol cars.

Toyota argues this 5percentagepoint differential favouring hybrids over petrol cars is insufficient, given the reduced emissions and better fuel consumption hybrids offer, according to its letter to Modi39;s Niti Aayog thinktank, which plays a key role in policymaking.

The tax differential over petrol cars should be as much as 11 percentage points for hybrids and 14 points for flexhybrids, says the letter from Toyota39;s India country head, Vikram Gulati.

That amounts to a tax rate of 37 on hybrids and 34 on flexhybrids, cuts of as much as 14 and 21, respectively, according to Reuters calculations.

We would kindly request for a proportionate policy support, Gulati wrote in the Sept. 20 letter, which has not previously been reported.

Toyota, which popularised hybrid technology with the Prius, has faced…