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As on : 01-Oct-2026

Economy - Reports
01-Oct-2026 10:55

New Corporate Average Fuel Economy norms for passenger vehicles to take effect from 1 April 2027

The Ministry of Power, Government of India has announced updated Corporate Average Fuel Economy (CAFE) norms for passenger vehicles, effective 1 April 2027 and valid through 31 March 2032. These regulations pertain to new passenger vehicles manufactured or imported for sale within India. The revised CAFE framework mandates incremental gains in fuel efficiency via progressively stricter annual targets spanning the five-year period. The fuel-consumption benchmark will decrease from 3.996 litres/100 km in 2027–28 to 3.3273 litres/100 km in 2031–32, a reduction of approximately 16.7 per cent over the duration. The target curve has been adjusted to incorporate a more equitable, weight-sensitive methodology, with moderately less stringent requirements for lighter vehicles and heightened fuel efficiency expectations for heavier counterparts. The reference weight has been raised from 1,082 kg under prevailing norms to 1,229 kg under the new CAFE standards, a rise of roughly 13.6 per cent, reflecting the changing composition of the passenger vehicle inventory.

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