New CAFE Norms for Cars Notified: Stricter Fuel Economy Rules From April 2027

What Happened

The Ministry of Power has notified new Corporate Average Fuel Economy (CAFE) norms for passenger vehicles. These rules apply to new passenger vehicles made in India or imported for sale here. They will run from 1 April 2027 to 31 March 2032.

The new rules replace the current CAFE norms. The government finalised them after talking to car makers, industry bodies, researchers and other experts.

What Changes

• The fuel use target gets tighter every year. It moves from 3.996 litres per 100 km in 2027-28 to 3.3273 litres per 100 km in 2031-32. That is about 16.7 per cent better over five years.
• The target line is now flatter. Lighter cars get softer targets. Heavier cars must be more fuel efficient.
• The reference weight goes up from 1,082 kg to 1,229 kg. That is about 13.6 per cent more.
• The list of recognised fuel-saving technologies grows from four to twelve. Each one earns a 1 g CO₂/km concession, up to a maximum of 9.0 g CO₂/km.
• A Carbon Neutrality Factor now counts ethanol-blended petrol, biofuels and CBG. This gives car makers another way to improve their fleet score.
• Electric cars, range-extended EVs, plug-in hybrids, strong hybrids and flex-fuel vehicles get 'super credits' in fleet calculations.
• Makers can meet their targets over two-year or three-year compliance blocks. They can carry credits forward, trade them with other makers, or buy them through the Bureau of Energy Efficiency.
• Testing will happen under both MIDC and WLTP. This helps India move towards global test methods.
• Companies selling fewer than 1,000 units a year stay exempt from fleet-average targets.
• Technologies like solar reflective paints, advanced glazing and high-efficiency air conditioning get support under this framework.

What You Need to Do

If you plan to buy a car, nothing changes for you today. These norms apply to car makers, not to buyers. Over time, you can expect more fuel-efficient and cleaner options in showrooms.

If you run an auto company, check how the yearly targets fit your product line. Look closely at the super credits, the Carbon Neutrality Factor and the compliance blocks. These can ease your burden during the shift.

Deadline

The new norms start on 1 April 2027. They stay in force till 31 March 2032. The old CAFE norms will be replaced from 1 April 2027.