In Short : The Power Ministry has forwarded the CAFE-III proposal to the Prime Minister’s Office following detailed consultations with stakeholders, Union Minister H.D. Kumaraswamy said. The next phase of Corporate Average Fuel Efficiency norms is expected to tighten emission standards, promote cleaner mobility technologies, and align India’s transport sector with long-term energy security and climate objectives.
In Detail : Union Minister H. D. Kumaraswamy has stated that the Ministry of Power has submitted the proposal for the third phase of Corporate Average Fuel Efficiency norms, commonly referred to as CAFE-III, to the Prime Minister’s Office after holding comprehensive consultations with industry stakeholders. The submission marks a significant step toward finalizing the next stage of vehicle efficiency standards in India.
The proposed CAFE-III norms are expected to build upon earlier phases by setting more stringent fuel efficiency and emission reduction targets for passenger vehicles. These standards aim to lower average carbon emissions per kilometer, encouraging automakers to adopt cleaner technologies and improve fleet efficiency.
According to the minister, the government engaged automobile manufacturers, industry associations, and policy experts before finalizing the proposal. The consultative approach was intended to ensure that the new norms are ambitious yet practical, balancing environmental objectives with industry readiness and technological feasibility.
Corporate Average Fuel Efficiency standards function by requiring manufacturers to meet prescribed emission limits averaged across their fleet of vehicles sold within a specific period. Companies that exceed emission thresholds may face penalties, while those that outperform standards can gain compliance flexibility.
The transition to CAFE-III is likely to accelerate adoption of hybrid systems, electric vehicles, lightweight materials, and advanced engine technologies. By tightening norms progressively, the government aims to drive innovation while reducing the transport sector’s carbon footprint.
The move aligns with India’s broader climate commitments and long-term decarbonization goals. The transport sector is a significant contributor to greenhouse gas emissions, and improved fuel efficiency is seen as a cost-effective pathway to reducing oil imports and enhancing energy security.
Industry stakeholders have emphasized the importance of clear timelines and regulatory certainty to facilitate investment planning. Automakers require sufficient lead time to upgrade manufacturing processes, introduce new vehicle platforms, and align supply chains with upcoming standards.
The submission of the proposal to the Prime Minister’s Office indicates that the framework has reached an advanced stage of policy review. Once approved, the final notification of CAFE-III norms will provide regulatory clarity for the automotive industry and related sectors.
Overall, the advancement of CAFE-III reflects the government’s commitment to strengthening environmental governance while supporting industrial transformation. By encouraging cleaner mobility solutions and improved fuel efficiency, the new phase of norms is expected to contribute meaningfully to sustainable growth and reduced carbon intensity in India’s transport ecosystem.
