The government has notified the new Corporate Average Fuel Economy (CAFE) norms for passenger vehicles. They will replace the existing CAFE norms with effect from 1st April 2027 and remain applicable up to 31st March 2032.

 

It will apply to new passenger vehicles manufactured or imported for sale in India. The new framework provides greater regulatory clarity and a stable policy framework for the automobile industry. It also facilitates technological innovation and support the continued evolution of India’s passenger vehicle sector towards greater energy efficiency and lower fuel consumption.

 

According to Ministry of Power, the new CAFE framework will drive progressive improvements in fuel economy through year-on-year tightening of targets across all five years. The fuel-consumption benchmark is tightened from 3.9 litres per 100 km in 2027-28 to 3.32 litres per 100 km in 2031-32, representing an improvement of around over 16 percent over the period.

 

The revised target line has also been flattened to provide a more balanced, weight sensitive approach, with relatively softer targets for lighter vehicles and greater fuel efficiency requirements for heavier vehicles. Power Ministry stated that the new norms provide flexibility to manufacturers to adopt cleaner technologies, alternative fuels and other innovative solutions. The new CAFE framework promotes technological innovation in new technologies such as Solar reflective paints, advance glazing, high efficiency air-conditioning for improved fuel efficiency and India’s energy security and sustainability objectives.