New Delhi, Apr 13 (BNP): The government has proposed revised fuel efficiency standards under CAFE 2027, moving away from a strict target-based system to a phased and more flexible compliance approach, according to a draft prepared by the Ministry of Power in consultation with the Bureau of Energy Efficiency (BEE).
The updated framework introduces a flatter compliance curve, aimed at creating a more balanced system and reducing the earlier advantage available to heavier vehicles.
CAFE 2027 represents the third stage of India’s Corporate Average Fuel Efficiency roadmap, which is designed to improve vehicle efficiency and support the country’s long-term climate and energy goals. The proposed norms are set to take effect from April 1, 2027, and will be tightened gradually through FY32.
The draft reportedly relaxes earlier proposals made in September 2025 by adjusting the emission curve, allowing slightly higher fuel consumption limits than initially suggested.
To encourage cleaner mobility, the framework includes “super credits” for electric and hybrid vehicles, allowing them to be counted multiple times in fleet emission calculations. Plug-in hybrids and flex-fuel hybrids are also expected to receive higher credit benefits.
In addition, the proposal permits credit trading between manufacturers, giving automakers greater flexibility in meeting compliance requirements.
However, the report cautions that penalties for non-compliance could still run into hundreds of crores for large manufacturers, making adoption of cleaner technologies and effective credit management crucial for the industry.
