CAFE III: what India’s new car fuel rules measure
The 2027–32 standards tighten average fuel consumption across a manufacturer’s new passenger vehicles. That differs from the mileage of an individual car.
India’s next car fuel-consumption rules will apply from April 1, 2027. They require manufacturers to meet an average across their new passenger vehicles sold in India, with the benchmark tightening over five financial years. A buyer will still need to compare the efficiency of the particular car they choose.
The rules are called Corporate Average Fuel Efficiency, or CAFE. Their third phase regulates a manufacturer’s fleet average, so the mix of cars it sells matters alongside the efficiency of each model.
One manufacturer, many models
A manufacturer sells vehicles with different weights, engines and technologies. Under the rules, sales volume matters to the average: a widely sold model has more influence than a model sold in small numbers. The fleet measure brings those vehicles together to assess the manufacturer’s performance.
That creates several routes to improve the result. A company can reduce the consumption of a model, sell a larger share of more efficient models, or change the technologies in its range. Electric vehicles and certain hybrid and alternative-fuel technologies also receive specified adjustments in the compliance calculation. The regulatory average therefore includes both measured performance and the accounting rules set out in the notification.
The final September 29 Gazette notification, S.O. 5346(E), covers new passenger vehicles manufactured or imported for sale in India from April 1, 2027 to March 31, 2032. The obligation sits with manufacturers, rather than with owners of existing cars.
Reading the tightening benchmark
Fuel consumption is expressed in petrol-equivalent litres per 100 kilometres. Lower is better: fewer litres are used to cover the same distance under the specified test and calculation framework. This reverses the direction of the kilometres-per-litre mileage figures many buyers use, where higher is better.
Each manufacturer’s target depends on its fleet’s average unladen weight—the vehicle’s weight without occupants or cargo. The notification uses a reference mass of 1,229 kilograms. At that reference mass, the benchmark follows this path:
| Financial year | Benchmark consumption, litres per 100 km |
|---|---|
| 2027–28 | 3.9960 |
| 2028–29 | 3.8600 |
| 2029–30 | 3.7585 |
| 2030–31 | 3.5313 |
| 2031–32 | 3.3273 |
These are petrol-equivalent regulatory benchmarks at the reference mass. A manufacturer’s weight-dependent target can differ.
The change from 3.9960 to 3.3273 is a calculated reduction of 16.73% in litres per 100 km. The Power Ministry’s announcement presents the tighter framework as a way to lower fuel use while allowing several technology choices. The benchmark describes the regulation’s trajectory; a consumer’s savings depend on the chosen vehicle, distance driven and actual driving conditions.
Flexibility also shapes the result
Manufacturers remain subject to annual assessment, but failures to comply are assessed over two compliance blocks: the first three years, then the final two. The framework allows credits to be carried within those blocks and traded. This gives manufacturers flexibility as their product ranges change, while keeping the tightening targets in place.
Manufacturers below 1,000 vehicles a year are exempt from the specific targets but must still report their actual average consumption. That is a distinction between a target obligation and a reporting obligation, rather than an exemption for every small car.
Car buyers can compare models’ certified efficiency and powertrains, taking account of how and where they drive. For judging the policy itself, the relevant outcome will be the vehicles actually sold and their fuel use as the new standards take effect.
Archival photograph: “Road Trip Chandagaur to New Delhi India October 2011”, October 12, 2011, by ItsReallyRobert. Cropped images and the social composition are available under CC BY-SA 2.0.
