Volvo is ready to run buses on methanol, which can easily be manufactured in the country, Road Transport and Highways Minister Nitin Gadkari said.
The government is also planning to construct a separate lane for running electric trucks and buses on Delhi-Mumbai corridor, which can also run on diesel in city areas, he added.
"Plans are underway to introduce Double decker fleet of luxury buses to link cities like Delhi-Mumbai, Delhi-Jaipur and Delhi-Ludhiana. The fleet will be air conditioned with services that include hostesses (on board)... and I assure you charges will be much economic, less than present as these will run on alternative fuel," Mr Gadkari said on the sidelines of an Assocham event here.
The minister said these buses will run on alternative fuel like methanol, ethanol or electricity as it has been the present government's priority and policy to promote clean fuel and cut on the huge Rs 7 lakh crore import bills that India incurs per annum.
"We will aim at reducing private vehicles. The way the number of private vehicles are increasing, we need to construct one lane every three year, that will cost too much.
We need to discourage people from buying vehicles and improve the public transport," he said.
"Public transport on electric is our dream. We are bringing new innovative models. Automobile laws are changing. A consultant has been appointed to study automobile standards of Germany, France, UK and Sweden - right from fuel and will accept its recommendations and run vehicles accordingly," the minister said.
The government will erect an electric line - Delhi to Mumbai - to be reserved for electric transport, he said.
Mr Gadkari said India, specially the capital needs to reform its transport system as petrol and diesel vehicles caused much pollution and Delhi has to search solutions like "Odd and Even".
"Our emphasis is to introduce indigenous technologies based on alternative fuel that are cost effective, import substitute and pollution free. We are electric and coal surplus country. We have started 200 electric taxis at Nagpur and erected 25 charging stations. The model can be replicated," he said.
He said he had a talk with UP Chief Minister Yogi Adityanath for running buses on ethanol as UP farmers can produce the fuel from sugarcane.
Running vehicles on alternative fuel is bound to reduce the logistic costs by 4 to 6 per cent and boost the economy, the minister said.