India is tightening its upcoming fuel-efficiency norms — and removing a controversial concession for small cars in the process.

The government has scrapped a proposed exemption for petrol cars weighing 909 kg or less. Automakers argued it would largely benefit Maruti Suzuki, which dominates the small-car segment. In response, the revised draft from the Power Ministry removes this carve-out and reduces the previously granted advantage to heavier vehicles.

The new Corporate Average Fuel Efficiency (CAFE) norms are applicable from April 2027 for 5 years. These norms introduce a steeper path for emissions reductions. As a result, automakers with heavier fleets will now need to deliver stronger efficiency gains instead of relying on weight-based relaxations.

The plan aims to reduce average fleet emissions to about 100 grams/km by March 2032, from 114 grams/km currently. With credits from electric and plug-in hybrid vehicles, emissions could fall further to 76 grams/km if EV penetration reaches 11%.

The draft also includes a credit mechanism and allows pooling of performance between companies. Furthermore, it proposes penalties of up to $550 per car for non-compliance.

Ready to invest like a pro? Tradz by EquityPandit equips you with 100+ Free tools and knowledge you need to succeed. Download the Tradz app and gain access to daily stock lists and insightful market analysis and much more!