NEW DELHI: New Corporate Average Fuel Economy (CAFE) norms for passenger vehicles will take effect on 1 April 2027, requiring manufacturers to progressively improve fleet-level fuel efficiency over the following five years.
The framework applies to new passenger vehicles manufactured or imported for sale in India and will remain in force until 31 March 2032.
Fuel benchmark tightens by 16.7%
The fleet 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. This represents an improvement of about 16.7% over the five-year period.
The reference vehicle weight has also been increased from 1,082 kg under the existing framework to 1,229 kg. The revised target curve provides relatively softer requirements for lighter vehicles and stronger efficiency requirements for heavier vehicles.
EVs, hybrids and cleaner fuels recognised
Manufacturers will have multiple routes to meet their targets, including battery-electric vehicles, range-extended electric vehicles, plug-in hybrids, strong hybrids and flex-fuel vehicles.
The framework also recognises ethanol-blended petrol, biofuels and compressed biogas through a Carbon Neutrality Factor. The number of recognised fuel-conservation technologies has been expanded from four to 12.
Eligible technologies can receive a concession of 1 gram of carbon dioxide per kilometre each, subject to a maximum of 9 grams per kilometre.
Credit trading and flexible compliance
Manufacturers performing better than their targets will be able to generate credits for use within specified compliance blocks. Companies facing a compliance gap may use eligible carry-forward provisions, trade credits with other manufacturers or buy credits through a mechanism administered by the Bureau of Energy Efficiency.
Vehicle makers selling fewer than 1,000 units annually will remain exempt from fleet-average obligations.
Reporting will use both the Modified Indian Driving Cycle and the Worldwide Harmonized Light Vehicles Test Procedure, supporting a gradual move towards globally harmonised testing practices.