The Union Government has notified the new Corporate Average Fuel Economy (CAFE) Norms for passenger vehicles, which will come into effect from 1 April 2027 and remain applicable up to 31 March 2032. The new norms will apply to new passenger vehicles manufactured or imported for sale in India. The new framework will drive progressive improvements in fuel economy through year-on-year tightening of targets across all five years.
The fuel-consumption benchmark has been tightened from 3.9960 litres/100 km in 2027–28 to 3.3273 litres/100 km in 2031–32, which will result in an overall improvement of around 16.7 per cent over 5 years. There will be softer targets for lighter vehicles and greater fuel efficiency requirements for heavier vehicles. The reference weight has been increased from 1,082 kg under existing norms to 1,229 kg under new norms, an increase of around 13.6 per cent.
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Battery Electric Vehicles, Plug-in Hybrids and Flex-Fuel Vehicles will receive ‘super credits’, in fleet-average calculations. While EVs will benefit the most Flex fuel vehicles will get much lower credits in comparison with hybrids falling in between. The list of recognised fuel-conservation technologies has been expanded from four to twelve technologies. These will include a start/stop system, tyre pressure monitoring system and regenerative braking among others.
Manufacturers will have the option to meet their obligations over specified two-year/three-year compliance blocks, allowing greater flexibility in managing their technology transition and product portfolios over the compliance period. According to the norms manufacturers with annual sales of below 1,000 units will remain exempt from fleet-average obligations
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