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The Economic Times

Cheaper to run, but costlier to buy? New CAFE III rules kick in from April 2027; here's how your next car could be affected

electric vehicle Jyoti Prakash Gadia Pankaj Sharma Ethanol India Alternative Fuel Fuel Efficiency Petrol Emissions Economy

A car that costs more to buy but less to run could become a more common choice as India prepares to introduce its next set of fuel-efficiency standards. From April 1, 2027, automakers will have to comply with stricter Corporate Average Fuel Economy (CAFE III) norms, which aim to improve the efficiency of passenger vehicles sold in the country.

The regulations will remain in force until March 31, 2032. Over these five years, manufacturers will have to progressively reduce the average fuel consumption of their vehicle fleets, potentially encouraging the development of more efficient petrol cars, hybrids, electric vehicles (EVs) and alternative-fuel models.

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