India's Ministry of Power has notified the Corporate Average Fuel Economy (CAFE-3) norms, which will apply to passenger vehicle manufacturers from April 2027 through March 2032. The rules tighten fleet-level fuel consumption and CO2 requirements by 16.7% over the period, with the benchmark moving from 3.996 litres per 100 km in 2027-28 to 3.3273 litres per 100 km in 2031-32. The compliance formula now uses a reference vehicle weight of 1,229 kg and a flatter weight curve. That means lighter vehicles get softer targets while heavier vehicles face stricter ones, and there is no separate concession for small cars. Battery electric vehicles count as three vehicles for compliance, with added credits for plug-in hybrids, strong hybrids, flex-fuel hybrids, and flex-fuel vehicles. For anyone tracking India's transport decarbonization, CAFE-3 matters because it shifts automaker incentives toward cleaner drivetrains at the fleet level. The trade-off is that super-credits can let manufacturers meet paper targets while real-world emissions lag, so implementation details will decide whether the policy delivers actual fuel savings.
