Government Notifies New CAFE-3 Norms for Passenger Vehicles
ECONOMY & POLICY

Government Notifies New CAFE-3 Norms for Passenger Vehicles

The government has notified new Corporate Average Fuel Economy (CAFE-3) norms that will establish fuel-efficiency and carbon-emission limits for passenger vehicles from April 1, 2027, to March 31, 2032. The rules apply to new passenger vehicles manufactured or imported for sale in India, the power ministry said in a statement.

The framework covers passenger cars, including hatchbacks, sedans, special utility vehicles and multi-purpose vehicles with seating for eight passengers apart from the driver. It removes a concession proposed in the draft regulations for lightweight petrol cars weighing less than 909 kg and introduces a flattened target line that provides relatively softer requirements for lighter vehicles and stricter targets for heavier models.

The reference weight has been raised from 1,082 kg under the existing norms to 1,229 kg under CAFE-3, an increase of around 13.6 per cent. The fuel-consumption benchmark will tighten from 3.996 litres per 100 km in 2027-28 to 3.3273 litres per 100 km in 2031-32, representing an improvement of around 16.7 per cent over the period.

The rules offer manufacturers flexibility to use cleaner technologies, alternative fuels and other solutions. Battery Electric Vehicles (BEVs), Range-Extended Electric Vehicles (REEVs), Plug-in Hybrid Electric Vehicles (PHEVs), Strong Hybrid Electric Vehicles (SHEVs) and flex-fuel vehicles will receive volume-based multipliers, commonly known as super credits, when fleet-average emissions are calculated.

The ministry said the framework would support the deployment of cleaner vehicle technologies and encourage innovation in areas such as solar-reflective paints, advanced glazing and high-efficiency air-conditioning. A credit-debit mechanism will allow manufacturers exceeding their targets to carry credits forward, while those falling short can use past credits, trade credits with other automakers or purchase them through a Bureau of Energy Efficiency-administered programme. The norms are intended to improve fuel economy progressively across all five years and support India’s energy security, sustainability and increasing vehicle electrification.

The government has notified new Corporate Average Fuel Economy (CAFE-3) norms that will establish fuel-efficiency and carbon-emission limits for passenger vehicles from April 1, 2027, to March 31, 2032. The rules apply to new passenger vehicles manufactured or imported for sale in India, the power ministry said in a statement. The framework covers passenger cars, including hatchbacks, sedans, special utility vehicles and multi-purpose vehicles with seating for eight passengers apart from the driver. It removes a concession proposed in the draft regulations for lightweight petrol cars weighing less than 909 kg and introduces a flattened target line that provides relatively softer requirements for lighter vehicles and stricter targets for heavier models. The reference weight has been raised from 1,082 kg under the existing norms to 1,229 kg under CAFE-3, an increase of around 13.6 per cent. The fuel-consumption benchmark will tighten from 3.996 litres per 100 km in 2027-28 to 3.3273 litres per 100 km in 2031-32, representing an improvement of around 16.7 per cent over the period. The rules offer manufacturers flexibility to use cleaner technologies, alternative fuels and other solutions. Battery Electric Vehicles (BEVs), Range-Extended Electric Vehicles (REEVs), Plug-in Hybrid Electric Vehicles (PHEVs), Strong Hybrid Electric Vehicles (SHEVs) and flex-fuel vehicles will receive volume-based multipliers, commonly known as super credits, when fleet-average emissions are calculated. The ministry said the framework would support the deployment of cleaner vehicle technologies and encourage innovation in areas such as solar-reflective paints, advanced glazing and high-efficiency air-conditioning. A credit-debit mechanism will allow manufacturers exceeding their targets to carry credits forward, while those falling short can use past credits, trade credits with other automakers or purchase them through a Bureau of Energy Efficiency-administered programme. The norms are intended to improve fuel economy progressively across all five years and support India’s energy security, sustainability and increasing vehicle electrification.

Related Stories

Gold Stories

Next Story
Resources

Schindler named among Forbes’ World’s Best Employers 2026

Schindler has been named among Forbes’ World’s Best Employers 2026, a global ranking recognising companies for their workplace environments.Compiled by Forbes in partnership with Statista, the ranking is based on independent employee feedback, including whether employees would recommend their organisation to friends and family.The company said the recognition reflected its focus on creating a workplace where employees can develop their expertise and build careers. ..

Next Story
Infrastructure Urban

India needs an export-execution mindset: Vishesh Jain

Interview with Vishesh Jain, Founder & CEO, EximpleWhat gaps in India’s global trade ecosystem led you to build Eximple, and what problem did you see businesses struggling with most?Eximple came out of a problem that all three founders had seen from different choke points in the trade ecosystem. India has millions of MSMEs and manufacturers, and many of them can make products that are genuinely competitive on quality. Yet only a small fraction is able to build meaningful international businesses. In our experience, the gap is usually not manufacturing capability; it is the ability to exe..

Next Story
Building Material

Nuvoco reports 13.5% revenue growth in Q2 FY27

Nuvoco Vistas Corp. Ltd. reported consolidated revenue of Rs 27.9 billion for Q2 FY27, up 13.5% year on year. Cement sales volume rose 9% to 4.7 million tonnes (MMT), while EBITDA increased 11% to Rs 4.11 billion.The company said it began its cement operations in 2014 with a 2.3 MMT per annum (MMTPA) operation at Nimbol. It now aims to reach 35 MMTPA of cement capacity by FY28, nearly 15 times its initial capacity. Its portfolio spans cement, ready-mix concrete and modern building materials.On sustainability and cost efficiency, Nuvoco partnered with CleanMax for a 46.4 MW wind-solar hybrid re..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

SPECIAL OFFER
QR Code