India’s Corporate Average Fuel Efficiency (CAFE) norms aim to reduce CO₂ emissions by setting limits on the average fuel consumption of a carmaker’s entire fleet. For instance, Maruti Suzuki’s small cars like the Alto emit relatively low CO₂ due to their light weight and efficient engines. However, under the new CAFE III norms (effective from April 2027), emission targets will be calculated based on vehicle weight rather than model type.
This change benefits heavier vehicles like SUVs—since they are allowed higher emission limits—while smaller, lighter cars face stricter thresholds. As a result, manufacturers of affordable small cars have raised concerns about the fairness and practicality of applying such uniform standards across all vehicle categories.
1. To reduce carbon emissions from the transport sector.
2. To encourage innovation in fuel-efficient and cleaner vehicle technologies.
3. To align India’s regulations with global emission practices.
4. To promote long-term sustainability in the automobile industry.
• Maruti Suzuki argues that its small, fuel-efficient cars are unfairly penalised under the new norms due to their lower weight.
• Tata Motors and Mahindra support differentiated standards but seek relaxations for commercial vehicles.
• Toyota advocates global-style adjustments that account for vehicle size and emission categories.
The fixed CO₂ limit of 91.7 g/km for all car types overlooks the wide diversity in vehicle design and purpose.
Lighter, fuel-efficient vehicles face tighter thresholds even though they already emit less CO₂ compared to heavier models.
Regulatory pressures and added compliance costs have contributed to a 35% decline in small car sales between FY17 and FY25.
Rising vehicle prices have made even entry-level cars unaffordable for households earning below ₹12 lakh per year, widening the accessibility gap.
Larger and more polluting vehicles often benefit from lenient, weight-adjusted formulas, escaping the tougher checks that smaller cars face.
Manufacturers tend to push for selective concessions that protect their market segments instead of supporting sector-wide reforms promoting fairness and sustainability.
The rigid application of uniform emission norms risks undermining affordability without ensuring significant environmental benefits. A balanced and practical policy should set differentiated emission targets based on vehicle weight, type, and usage. India’s long-term emission strategy must focus on encouraging cleaner technologies while keeping car ownership within reach for ordinary citizens.
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