India revises CAFE-3 rules, dropping 909-kg car concession while easing targets for light vehicles

The Corporate Average Fuel Economy (CAFE)-3 standards, set to run from April 2027 to March 2032, have been finalized after a protracted dispute over whether small, light cars should receive a separate emissions concession. The government scrapped the proposed 3 g/km deduction for petrol vehicles weighing up to 909 kg, a measure strongly backed by Maruti Suzuki but opposed by most other manufacturers. Instead, it revised the core CAFE formula, raising the reference weight to 1,229 kg and adopting a gentler, year-by-year weight adjustment that eases targets for lighter fleets and tightens them for heavier ones.

The final rules also keep a super-credit mechanism that multiplies the impact of electric, range-extended, plug-in hybrid and strong hybrid vehicles, though the multiplier is reduced from the earlier 4x proposal. Industry groups such as the Society of Indian Automobile Manufacturers, Tata Motors, JSW MG Motor, Renault, Mercedes-Benz, Toyota and Kia participated in the debate, raising concerns about safety, affordability and the precedent for other regulations. The outcome balances relief for small-car makers with broader incentives for cleaner technologies, shifting the focus to portfolio redesign rather than categorical exemptions.