The Ministry of Power (MoP), on July 16, 2026, issued a draft notification proposing the Corporate Average Fuel Efficiency (CAFE) 2027 energy consumption standards for M1 category motor vehicles under the Energy Conservation Act, 2001. The proposed standards are scheduled to come into effect from April 1, 2027, and stakeholders have been invited to submit objections or suggestions within 21 days from the date of publication of the draft on the websites of the Ministry of Power and the Bureau of Energy Efficiency (BEE).
The draft introduces a comprehensive regulatory framework covering applicability, definitions, compliance methodology, reporting requirements, and credit-debit mechanisms for manufacturers and importers of M1 category vehicles. It proposes annual average fuel consumption standards based on the Modified Indian Driving Cycle (MIDC), with progressively stringent targets from FY 2027-28 to FY 2031-32. The framework also provides for concepts such as compliance passbooks, credit pooling among manufacturers, and separate definitions for flex-fuel vehicles, strong hybrid electric vehicles, plug-in hybrid electric vehicles, and small-volume manufacturers.
The notification further prescribes the methodology for calculating manufacturer-specific fuel consumption standards based on the weighted average unladen mass of vehicles and outlines the performance assessment mechanism to evaluate compliance. The proposed CAFE 2027 framework is intended to enhance vehicle fuel efficiency, reduce carbon emissions, and support India's energy conservation and climate objectives by establishing a transparent, technology-neutral compliance regime for passenger vehicle manufacturers.
[Notification No. S.O. XXXX(E)]
