New Delhi, September 30: The Government has notified the new Corporate Average Fuel Economy (CAFE-3) norms, introducing stricter fuel-efficiency and carbon-emission targets for passenger vehicles for the period from April 1, 2027, to March 31, 2032.
The norms will apply to new passenger vehicles manufactured or imported for sale in India, including hatchbacks, sedans, special utility vehicles and MPVs with seating capacity of up to eight passengers, excluding the driver.
Under CAFE-3, vehicle manufacturers will have to progressively improve the average fuel efficiency of their passenger vehicle fleets while meeting prescribed carbon-emission targets.
A major change from the draft regulations is the removal of a proposed concession for lightweight petrol cars weighing less than 909 kg. The final norms instead introduce a flatter, weight-sensitive target line, with relatively less stringent targets for lighter vehicles and higher efficiency requirements for heavier vehicles.
The reference weight used under the new framework has also been increased from 1,082 kg under the existing norms to 1,229 kg, marking an increase of around 13.6 per cent.
The new regulations provide manufacturers greater flexibility to adopt cleaner technologies, alternative fuels and other innovations. Electric vehicles, range-extended electric vehicles, plug-in hybrids, strong hybrids and flex-fuel vehicles will receive incentives through a system of “super credits”.
These credits, also known as volume derogation multipliers, allow manufacturers to receive additional benefits in their fleet-average emission calculations when they produce cleaner and advanced vehicle models.
The government has also tightened the fuel-consumption benchmark. It will decline from 3.996 litres per 100 km in 2027–28 to 3.3273 litres per 100 km by 2031–32, representing an improvement of around 16.7 per cent over the five-year period.
The CAFE-3 framework will progressively tighten targets every year, encouraging automakers to improve vehicle efficiency and accelerate the adoption of cleaner technologies.
The regulations also promote innovations such as solar-reflective paints, advanced glazing and high-efficiency air-conditioning systems, aimed at improving overall vehicle efficiency and supporting India’s energy-security and sustainability objectives.
A new credit-debit mechanism has also been introduced. Manufacturers exceeding their CAFE targets will earn credits that can be carried forward, while companies falling short can cover their deficit through previously earned credits, credit trading with other manufacturers or a buyout programme administered by the Bureau of Energy Efficiency.
The government said the new CAFE framework is designed to support technological advancements, wider adoption of alternative and renewable fuels, increasing vehicle electrification and developments in global automotive technology.
