Daijiworld Media Network – New Delhi
New Delhi, Feb 6: India has scrapped a proposed concession for small cars in its upcoming fuel-efficiency regulations after automakers including Tata Motors and Mahindra & Mahindra objected that the move would favour a single company, according to a government document.
A draft circulated in September had proposed relaxed norms for petrol cars weighing 909 kg or less, a provision widely seen as benefiting Maruti Suzuki, which dominates nearly 95 per cent of India’s small car market. However, the Power Ministry has now removed the exemption and tightened several other parameters in the revised draft rules reviewed by Reuters.
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The updated framework increases pressure on all automakers to accelerate the adoption of electric and hybrid vehicles. It also curbs what the document described as “over-compensation” for vehicle weight, seeks to level the playing field between manufacturers of lighter and heavier vehicles, and aims to deliver real-world fuel efficiency gains through a steeper emissions reduction pathway.
The Power Ministry did not respond to requests for comment.
Transport accounts for about 12 per cent of India’s total energy use and is a major contributor to petroleum imports and carbon emissions, with passenger vehicles responsible for nearly 90 per cent of transport-related emissions. Corporate Average Fuel Efficiency (CAFE) norms regulate permissible CO2 emissions across a manufacturer’s fleet of passenger vehicles weighing up to 3,500 kg and are revised every five years to push cleaner technologies such as electrification, compressed natural gas and flex-fuel systems.
The new rules, scheduled to come into force from April 2027 for a five-year period, are expected to play a key role in shaping automakers’ product strategies and powertrain investments, though the timeline for final notification remains unclear.
Under the earlier September draft, fuel-consumption targets would have risen more sharply with vehicle weight, easing compliance for makers of heavier vehicles such as Tata, Mahindra and Volkswagen, while tightening requirements for lighter-fleet manufacturers like Maruti Suzuki. This imbalance had prompted the proposed carve-out for small cars.
The revised plan reduces the advantage for heavier vehicles, stating that manufacturers with heavier fleets will now be required to achieve stronger intrinsic efficiency improvements.
A credit system under the new norms will reward companies that sell higher numbers of electric vehicles and plug-in hybrids, while also allowing pooling of fuel-consumption performance between automakers. Penalties for non-compliance could reach up to $550 per car.
The revised framework targets a reduction in average fleet emissions to around 100 grams per kilometre over the five years ending March 2032, down from 114 grams per kilometre currently. With the use of credits, emissions could fall to as low as 76 grams per kilometre if electric vehicles account for 11 per cent of total car sales by 2032.