India's automotive trade association, the Society of Indian Automobile Manufacturers (SIAM) has cut its market growth forecast for the current financial year (ending March 31, 2017) to 6-8%.

Reuters reported that policy changes such as higher taxes on cars and a ban on the sale of large diesel cars in New Delhi are behind the slower growth forecasts.

SIAM originally expected sales to grow by about 12% this year and said that analysts were revising forecasts down in the light of recent developments.

India's car market has grown as the economy has picked up over the last few years, aided also by lower fuel prices.

However, at the end of last year a court ordered a temporary ban on the sale of large diesel cars in New Delhi to curb smog in one of the world's most polluted cities. It was due to end on March 31 but has been extended. The ban applies to diesel cars with engines over 2 litres. Some analysts are concerned that the ban could be extended to other vehicles and cities.