New Delhi: India’s carmakers will get three years to self-certify a dozen fuel-saving technologies under the Corporate Average Fuel Efficiency (CAFE) III norms, which will kick in on 1 April, helping them meet the tighter efficiency targets. During this period, the ministry of road transport and highways (MoRTH) will develop certification methods for these technologies, which will become mandatory from FY31, according to the norms published on 30 September.
These 12 fuel efficiency technologies are: start-stop ignition systems, tyre pressure monitoring systems, regenerative braking, efficient 12V/48V alternators, six-speed or higher transmissions, 12V/48V motor-generators (micro-hybrids), exterior LED lighting, advanced glazing, electric water pumps, high-efficiency air-conditioning systems, solar-reflective paint and PWM-controlled radiator fans, as per the final norms.
CAFE-III norms were notified amid a deep divide in the world’s third largest automobile market by sales volume, as a September 2025 draft of these norms had created a special carve-out for cars weighing under 909kg, which was widely seen benefiting market leader Maruti Suzuki India Ltd. The issue is now resolved as the overall targets for light cars have been eased in the final norms.
After one year of consultations, the final norms were notified by the ministry of power on Wednesday, setting a 16% fuel efficiency improvement target for India’s carmakers over the next five years.
As per the norms, MoRTH will develop the certification requirements during the first three-year CAFE-III block, during which carmakers will self-certify these products and claim a 9g CO2/km incentive every year, equal to a fuel efficiency relaxation equalling 0.3795 liters/100 km benefit on the target every year.
Fuel efficiency targets are set for the average fuel efficiency of a carmaker’s annual sales. They are measured in terms of litres of fuel consumed for covering 100 km. The math for how much fuel a vehicle consumes begins with its tailpipe emissions (grams of carbon dioxide emitted per km), that’s converted into fuel used per 100 km.
Per the latest norms, carmakers must ensure their fleets have an average efficiency of 3.9960 liters/100 km in FY28, followed by 3.8600 liters in FY29, 3.7585 in FY30, 3.5313 in FY31 and 3.3273 in FY32.
They will have to comply with requirements that MoRTH will create for these 12 technologies in the second block, covering FY31 and FY32, the norms said.
This marks a change from the draft norms issued on 16 July, which had allowed automakers to claim fuel-efficiency benefits from these technologies without specific certification requirements. It only gave MoRTH the discretion to introduce certification methods later.
The final norms, however, make it clear that such certification requirements will be developed and will apply to automakers from the second CAFE-III block. Some of these elements, such as start-stop systems and regenerative braking, are mostly already there in cars, and are nearly a decade-old fuel efficiency technology.
A senior executive at a carmaker said the fuel-saving technologies, in addition to the credit purchase mechanism, will ease compliance.
“It introduces a block period concept, bringing in 12 fuel efficiency technologies with target credit against each and allows a credit purchase facility from BEE (Bureau of Energy Efficiency),” the executive said. The block period refers to a method of assessing carmakers after the first three-year span and after the second two-year period, instead of a yearly assessment of targets met and penalties accrued.
Carmakers lauded the introduction of these fuel-saving technology savings, which will help them comply with the final targets.
“The framework adopts a technology-neutral approach recognizing multiple pathways to improve fleet efficiency, including electrification, alternative fuels and advanced fuel-saving technologies,” Tarun Garg, managing director and chief executive at Hyundai Motor India, said on 30 September.
“The targets are appropriately ambitious and provide a clear trajectory through 2031-32. We also welcome the inclusion of a compliance block, technology credits, cleaner-fuel benefits and super credits for EVs and other advanced technologies,” said Velusamy R., president, automotive business at Mahindra & Mahindra Ltd, in a statement on the norms.
Queries emailed to BEE, the ministries of road transport and highways, power, and heavy industries, and carmakers Maruti Suzuki, Tata Motors, Hyundai, and M&M remained unanswered.
Clean mobility experts say MoRTH’s certification of these 12 technologies is an essential part of the CAFE regime. “Now, when the CAFE-III notification is out, the onus of ensuring that the OEMs meet the regulations is on the regulator (BEE),” said Sharif Qamar, associate director of transport and urban governance at Delhi-based think tank The Energy and Resources Institute (Teri). “This would include enforcement of penalties, if accrued; ensuring double accounting is eliminated in technology adoption; and plugging any kind of slippages during the CAFE-III reporting cycles.”
Some experts also said rewarding these 12 technologies would be a double benefit for carmakers as many of these technologies are already adopted.
“Old equipment is earning new credits in CAFE-III norms. Idle start-stop systems, regenerative braking, six-speed or higher transmissions, and tyre pressure monitoring systems are already included in the CAFE regime since 2018,” said Randheer Singh, chief executive of ForeSee Advisors, a consultancy firm, and former director of electric mobility at NITI Aayog.
“Since automatic start-stop systems are already widely available across several passenger vehicle models in India, continuing to provide additional fuel consumption credits for this technology may not adequately reward novel innovation, and future incentives should, instead, focus on advanced technologies that deliver incremental efficiency improvements, said Qamar of Teri.
“Further, certain vehicle categories eligible for super credits may already be equipped with technologies that are mandatory or inherently integrated into those vehicle types. In such cases, allowing additional technology-based incentives could result in double counting of compliance benefits,” he said.
