REGULATORY · COMPETITIVE · INDIA
India confirms April 2027 start for stricter CAFE III fuel-efficiency standards
Change
India will implement CAFE III corporate average fuel-efficiency/emissions norms on April 1, 2027, with final guidelines due by end-March and no timeline relaxation, and penalties applying for non-compliance by March 31 as targets tighten over time.
Why it matters
The government has decided to stick to the April 1, 2027 implementation schedule for CAFE III, despite industry requests to defer. Officials said the CAFE III guidelines will be finalized by end-March, setting the compliance framework ahead of the effective date. Automakers that miss the lower-emissions mandate by March 31 face penalties, with requirements tightening progressively thereafter. The latest draft referenced in the report contemplated a step-down in targets (e.g., 92.11g CO2/km to 76.01g CO2/km), while industry has argued for a flatter 89.6g CO2/km target across the period—leaving the final stringency level as a key constraint once guidelines are issued.
Implications
- • Deferral risk removed: compliance planning anchored to Apr 1, 2027 start date
- • Penalty exposure becomes a defined cost for fleets missing March 31 thresholds
- • Product mix and fleet-average CO2 constraints tighten progressively under CAFE III
- • Final end-March guidelines may lock in target stringency vs industry’s flat target ask
Who is affected
- • Passenger vehicle and commercial vehicle OEMs selling into India
- • Automotive compliance, homologation, and regulatory affairs teams
- • Powertrain and emissions-control suppliers (ICE, hybrid, EV components)
- • Fleet operators and high-volume vehicle purchasers sensitive to model availability/pricing
Source
Topics
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