Government of India issues draft CAFE 2027 fuel-efficiency standards for cars
The Government of India published draft Corporate Average Fuel Efficiency (CAFE) 2027 standards on 25 September 2025, applying from 1 April 2027 to 31 March 2032 for M1 passenger cars and replacing the 2015 and 2021 norms. Passenger-car manufacturers and importers must prepare for fleet-wide average fuel consumption limits, mandatory MIDC and WLTP reporting from 1 April 2026, and pooling-based compliance enforced by MoRTH.
The Government of India published the draft Corporate Average Fuel Efficiency (CAFE) 2027 standards on 25 September 2025 to seek public comments, replacing the 2015 and 2021 norms. The standards apply from 1 April 2027 to 31 March 2032 to M1 category passenger cars with up to nine seats and weight not exceeding 3,500 kg, covering both India-manufactured and imported vehicles. Average fuel consumption is measured in petrol-equivalent litres per 100 km, factoring weight, declared CO2 emissions, and testing cycles, with special purpose vehicles and small-volume manufacturers exempted.
The draft affects passenger-car manufacturers and importers, who must ensure fleets meet prescribed annual average fuel consumption limits. Electric, hybrid, and flex-fuel vehicles receive super credits through higher weightage. A carbon neutrality factor applies: 8% for petrol with E20-E30 ethanol blends, 22.3% for flex-fuel ethanol and strong hybrid electric vehicles, and 5% (or notified CBG blending, whichever is higher) for CNG vehicles. Manufacturers may form pools of up to three companies, with a pool manager responsible for ensuring compliance and paying any penalties.
From 1 April 2026, manufacturers must declare both performance MIDC and WLTP in g CO2/km to the Bureau of Energy Efficiency for models sold, as notified by MoRTH. Manufacturers should submit comments during consultation and prepare for enforcement, with MoRTH responsible for testing and reporting and the Ministry of Power and BEE conducting compliance checks under the Energy Conservation Act, 2001. Firms should monitor the proposed lowering of the standard car-weight benchmark if 2026 average new-car weight falls below 1,170 kg.
Key figure — Compliance period: CAFE 2027 standards apply from 1 April 2027 to 31 March 2032
This content is AI-assisted and reviewed by the ESG Broadcast editorial team. It is for informational purposes only and is not investment or ESG-rating advice. See our Technology & Transparency policy.
← Back to ESG Broadcast