The Ministry of Power, through the Bureau of Energy Efficiency, formally notified the third and most stringent phase of Corporate Average Fuel Economy standards for passenger vehicles manufactured in or imported into India. The progressive regulatory mandate requires automobile manufacturers to achieve an aggregate sixteen percent improvement in fleet-wide fuel efficiency through 2032, establishing stringent carbon emission limits across entire model lineups.
Under the revised regulatory parameters, automakers that fail to meet corporate fleet carbon emission targets will face substantial financial penalties calculated on every non-compliant vehicle sold. The statutory norms introduce enhanced super-credit weighting mechanisms for electric vehicles, plug-in hybrids, and flex-fuel platforms to incentivize automakers to accelerate the electrification of their product portfolios.
Automotive industry federations welcomed the long-term policy clarity while highlighting the substantial capital investments required in battery supply chains, lightweight vehicle metallurgy, and advanced powertrain calibration. Energy economists emphasized that rigorous vehicle efficiency standards will curb national petroleum import expenditures while slashing urban air pollution across major metropolitan areas.
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