The news was welcomed by the auto industry after a series of lower court rulings banned diesel vehicles, both new and old, on concerns that their

The Supreme Court allowed the registration of large diesel vehicles with an engine capacity of two litres or more in Delhi and the surrounding National Capital Region; the green levy will be imposed on the retail price of each vehicle, excluding tax and other costs.

India’s highest court will decide later on whether to impose the tax, called a green cess, on diesel vehicles with smaller engines.

The court imposed a temporary ban in 2015 on the sale of large diesel cars in Delhi and said it was considering an additional tax, threatening sales of carmakers such as Toyota and Tata.

An official of the Society of Indian Automobile Manufacturers said: “We are happy that the ban has been lifted.

“There are certain companies that were very badly impacted and they will now be able to sell their vehicles and equip their market in the NCR region, which is good for the industry.”

Mercedes-Benz India also welcomed the Supreme Court decision.

Previous court-ordered restrictions on diesel vehicles, which experts say cause worse air pollution than other engine types, are often contradictory and poorly enforced in India. In a recent ruling, India’s top environmental court ordered the authorities to remove all diesel vehicles over 10 years old from the capital’s streets.

Delhi is among the world’s most polluted cities and environmentalists have urged the government to tackle the problem.

Vivek Chattopadhyaya, Air Pollution Control programme manager at the Centre for Science and Environment, said after Friday’s the court ruling: “It is a regressive step and unfortunate that the central government could not defend the public cause.”