The updated framework introduces a flatter compliance curve, reducing the earlier advantage for heavier vehicles while allowing slightly higher fuel consumption than previously planned
-1776066574419_d.png "Government proposes softer CAFE 2027 norms to ease pressure on automobile industry")
Government tweaks emission rules, boosts flexibility for automakers. Representational Image
The government has proposed a softer set of Corporate Average Fuel Efficiency (CAFE) norms for the 2027–2032 period, offering relief to the domestic auto industry, NDTV Profit reported.
According to a revised draft prepared by the Ministry of Power in consultation with the Bureau of Energy Efficiency (BEE), the government has moved away from a rigid target framework in favour of a phased tightening approach. The proposal includes a flatter compliance curve, reducing the advantage previously enjoyed by heavier vehicles.
Known as CAFE 2027, the draft represents the third stage of India’s fleet-level fuel economy road map, aimed at aligning the automobile sector with the country’s broader climate and energy goals.
The norms are set to take effect from April 1, 2027, and will tighten progressively through FY32, the report said.
The report added that the revised framework marks a notable softening from the September 2025 draft. The emission curve has been re-calibrated with a new slope formula — set at 0.00158 in FY28 and easing to 0.00131 by FY32 — allowing slightly higher fuel consumption than previously proposed.
The draft also includes super credits for electric and hybrid vehicles, allowing them to count as multiple vehicles when calculating fleet-level emissions. Plug-in hybrids and flex-fuel hybrids are expected to receive higher multipliers under the proposed framework.
Credit trading between manufacturers has also been permitted, providing carmakers additional flexibility in managing compliance obligations.
However, penalties for non-compliance could run into hundreds of crores of rupees for large manufacturers, making the EV and hybrid credit mechanism a significant financial lever for the industry, the report said.
Additionally, niche manufacturers producing fewer than 1,000 units annually have been exempted from compliance requirements, offering relief to small-volume players.
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