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The Government of India has released the draft Corporate Average Fuel Efficiency (CAFE) III norms for passenger vehicles and invited public comments for 21 days. The new norms will apply from 1 April 2027.
Context
What are CAFE Norms?
CAFE (Corporate Average Fuel Efficiency) norms prescribe the average fuel efficiency (or CO₂ emission limits) that automobile manufacturers must achieve across all the passenger vehicles they sell.
Objective: Reduce fuel consumption, lower carbon emissions, and promote cleaner vehicle technologies.
Applicability
- Applicable from 1 April 2027
- Covers M1 category passenger vehicles
- Up to 8 passenger seats (excluding the driver’s seat)
- Applicable to both manufactured and imported vehicles sold in India.
Objectives of CAFE III
- Improve fuel efficiency
- Reduce CO₂ emissions
- Promote electric and hybrid vehicles
- Encourage renewable fuels (E20, ethanol, CNG, CBG)
- Support India’s climate commitments
- Reduce crude oil imports
- Provide long-term policy certainty to automobile manufacturers
