The WTO estimated that nearly 7,00,000 people die each year in south Asia and nearly 40,000 premature deaths caused each year in Indian cities due to air pollution. The emission through the vehicle is contributing nearly 70% to air pollution in Indian cities. To avoid these health hazards, the Central Government has framed various policies, laws and regulations for preventing the emission of Air pollutant through the vehicular exhaust. Strict compliance to emission norms can cause huge economic losses to Automobile Industry if no relaxation is given to sell outdated inventory. The Indian Automobile industry is employing millions of people and contributing nearly 7% to the Indian GDP. The Central Government while framing laws must consider the health of people as well as the financial health of the Automobile industry. The strong financial condition of the Automobile industry will make sure smooth compliance with emission norms. This will prevent Air pollution through the vehicle and will create millions of job opportunities in the Automobile industry in future. The researcher in this paper will critically analyse the legal framework dealing with the prevention of Air pollution through the vehicular exhaust. The researcher will find out the issues and challenges before the government and Automobile industry for the introduction of eco-friendly auto technologies in India.