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India Softens CAFE 2027 Draft, Easing Fleet Emission Targets

Policymakers aim to ease near‑term costs by flattening targets with credit incentives in reserve.

Overview

  • India’s Ministry of Power and the Bureau of Energy Efficiency, which released a revised Stage 3 draft on Monday, set the rules to start on April 1, 2027 with tightening through FY32.
  • The draft flattens the fleet-efficiency curve by cutting the slope to 0.00158 in FY28, raising the reference weight to 1,229 kg, and lifting baseline consumption to 3.996 L/100 km.
  • Smaller cars gain more headroom because limits scale with mass, and the earlier 3 g CO2/km concession for sub‑4‑metre petrol cars has been removed and folded into the new curve.
  • Battery-electric models still earn super‑credits counted as three vehicles, while multipliers for strong hybrids and flex‑fuel vehicles drop to 1.6 and 1.1.
  • Manufacturers can trade compliance credits and makers under 1,000 units are exempt, yet large penalties remain possible, shaping pricing, EV and hybrid plans, and model lineups.