India CAFE-III Draft: Stricter Car Mileage Targets and Carbon Emission Rules from 2027

India's Bureau of Energy Efficiency has released a draft of the CAFE-III fuel-efficiency rules, proposing a carbon emission target of 91.7 grams per kilometer for new cars starting FY2027-28. The rules shift testing from the older MIDC lab cycle to the WLTP method, which better reflects real-world fuel consumption. This change applies to all manufacturers' fleet averages, not individual models, and runs through FY2031-32. The draft also revises super-credit multipliers for low-emission vehicles. Hydrogen fuel-cell vehicles get a multiplier of five, battery electric vehicles keep four, but plug-in hybrids and strong hybrids see reduced incentives compared to the current CAFE-II regime. A separate provision for ethanol-compatible vehicles is pending further study. For car buyers, the draft does not impose direct requirements but will likely push manufacturers toward more hybrids, EVs, and efficiency features like regenerative braking and auto start-stop. Price impacts remain unclear and depend on how automakers choose to comply once the rules are finalized. Public comments are still open before the rules become binding.