New CAFE norms notified for passenger vehicles from 1 April 2027 to 31 March 2032: target tightens to 3.3273 litres/100 km
The Ministry of Power says it has notified new Corporate Average Fuel Economy (CAFE) norms for new passenger vehicles manufactured or imported for sale in India, applicable from 1 April 2027 to 31 March 2032. The fuel-consumption benchmark tightens from 3.996 litres/100 km in 2027–28 to 3.3273 litres/100 km in 2031–32.
Key facts
- In force
- 1 April 2027 to 31 March 2032
- Who it affects
- Passenger vehicle manufacturers and importers selling in India; makers of electric, hybrid and flex-fuel vehicles; auto component and technology suppliers
- What it is
- Rule change
- Section
- Licences
- Published
- 30 September 2026
In 30 seconds
- The new norms replace the existing CAFE norms from 1 April 2027 and apply up to 31 March 2032.
- They apply to new passenger vehicles manufactured or imported for sale in India.
- Benchmark: 3.996 litres/100 km in 2027–28, tightening to 3.3273 litres/100 km in 2031–32 — around 16.7 per cent over the period.
- Reference weight raised from 1,082 kg under the existing norms to 1,229 kg.
- Recognised fuel-conservation technologies expanded from four to twelve; 1 g CO₂/km concession per eligible technology, maximum 9.0 g CO₂/km.
- Manufacturers with annual sales below 1,000 units remain exempt from fleet-average obligations.
हिंदी में सार
ऊर्जा मंत्रालय के अनुसार यात्री वाहनों के लिए नए Corporate Average Fuel Economy (CAFE) मानक अधिसूचित किए गए हैं, जो 1 अप्रैल 2027 से 31 मार्च 2032 तक लागू रहेंगे। ईंधन खपत का मानक 2027–28 के 3.996 लीटर/100 किमी से घटकर 2031–32 में 3.3273 लीटर/100 किमी होगा। ये भारत में बिक्री के लिए बनाए या आयात किए गए नए यात्री वाहनों पर लागू होंगे; सालाना 1,000 से कम वाहन बेचने वाले निर्माताओं को छूट जारी रहेगी।
Before and now
1,082 kg under the existing norms.
1,229 kg under the new CAFE norms — an increase of around 13.6 per cent.
What has been notified
In a release dated 30 September 2026, the Ministry of Power says it has notified the new Corporate Average Fuel Economy (CAFE) Norms for passenger vehicles. They come into effect from 1 April 2027, remain applicable up to 31 March 2032, and replace the existing CAFE norms from 1 April 2027. They apply to new passenger vehicles manufactured or imported for sale in India.
The targets
| Point | What the release says |
|---|---|
| Fuel-consumption benchmark, 2027–28 | 3.996 litres/100 km |
| Fuel-consumption benchmark, 2031–32 | 3.3273 litres/100 km — an improvement of around 16.7 per cent over the period |
| Tightening | Year-on-year, across all five years |
| Reference weight | Raised from 1,082 kg under the existing norms to 1,229 kg — around 13.6 per cent |
| Target line | Flattened: relatively softer targets for lighter vehicles and greater fuel-efficiency requirements for heavier vehicles |
The release does not give the benchmark for each of the intermediate years.
Flexibilities for manufacturers
- Carbon Neutrality Factor (CNF): recognises renewable and low-carbon fuels, including ethanol-blended petrol, biofuels and CBG, as an additional pathway to improve fleet-level CAFE performance.
- Fuel-conservation technologies: the recognised list is expanded from four to twelve. A concession of 1 g CO₂/km is available for each eligible technology, subject to a maximum of 9.0 g CO₂/km. The release mentions solar reflective paints, advanced glazing and high-efficiency air-conditioning.
- Super credits: battery electric vehicles, range-extended electric vehicles, plug-in hybrids, strong hybrids and flex-fuel vehicles receive volume derogation factors in fleet-average calculations.
- Compliance blocks: manufacturers may opt to meet their obligations over specified two-year/three-year compliance blocks.
- Credits: a manufacturer that performs better than its target generates credits, which may be carried forward within the compliance blocks. One with a compliance gap may use carry-forward provisions, exchange or trade credits with other manufacturers, or purchase credits through the buyout mechanism administered by the Bureau of Energy Efficiency.
- Testing: reporting will be under both the Modified Indian Driving Cycle (MIDC) and the Worldwide Harmonized Light Vehicles Test Procedure (WLTP).
- Small manufacturers: those with annual sales of below 1,000 units remain exempt from fleet-average obligations.
The Ministry says the norms were finalised after consultations with automobile manufacturers, industry associations, academia and other stakeholders.
What the release does not give
It does not give the notification number, the values of the super credits or of the Carbon Neutrality Factor, the price of credits under the buyout mechanism, or the consequence of not meeting the target.
What manufacturers and importers should do
Passenger-vehicle manufacturers and importers selling in India should plan their fleet for the year-on-year targets that start on 1 April 2027, decide whether to use a two-year or three-year compliance block, and prepare to report under both MIDC and WLTP. The notification itself has to be read for the yearly targets and the credit rules.
Questions and answers
From when do the new CAFE norms apply?
From 1 April 2027 up to 31 March 2032. According to the Ministry of Power, they replace the existing CAFE norms with effect from 1 April 2027.
Which vehicles are covered?
New passenger vehicles manufactured or imported for sale in India. Manufacturers with annual sales of below 1,000 units remain exempt from fleet-average obligations.
What is the new target?
The fuel-consumption benchmark is tightened from 3.996 litres/100 km in 2027–28 to 3.3273 litres/100 km in 2031–32, an improvement of around 16.7 per cent over the period, with year-on-year tightening.
What can a manufacturer do if it falls short of its target?
As per the release, it may use eligible carry-forward provisions, exchange or trade credits with other manufacturers, or purchase credits through the buyout mechanism administered by the Bureau of Energy Efficiency.
Do electric and hybrid vehicles get any benefit?
Yes. Battery electric, range-extended electric, plug-in hybrid, strong hybrid and flex-fuel vehicles receive volume derogation factors, also called super credits, in fleet-average calculations. The release does not give the factors.
Published 30 September 2026. Updated 7 October 2026. This report is for general information and is not professional advice. Read the source document before acting on it.