India’s Revised CAFE Norms (Phase III)

Notified by the Ministry of Road Transport and Highways (MoRTH) on September 25, 2025, the Phase III Corporate Average Fuel Economy (CAFE) norms mandate automakers to maintain fleet-wide average fuel efficiency.

The revised norms aim to curb CO₂ emissions and encourage cleaner vehicle technologies.

What are CAFE Norms?

Aspect	Details
Full Form	CAFE stands for Corporate Average Fuel Economy.
Main Purpose	Improve vehicle fuel efficiency and reduce vehicular emissions.
Regulatory Focus	Automakers must maintain a fleet-wide average fuel efficiency.
Phase III Notification	Notified by MoRTH on September 25, 2025.

Key Regulatory Provisions

Provision	Details
Revised Benchmarks	The average fleet weight benchmark has been raised to 1,170 kg, reflecting the market shift toward heavier SUVs and electric vehicles.
Super Credits	Manufacturers receive higher weightage for producing EVs, hybrids, and flex-fuel vehicles in efficiency calculations.
Carbon Neutrality Factor	Introduces fuel-based CO₂ discounts to incentivise the adoption of alternative and cleaner fuels.

PT Facts

CAFE: Stands for Corporate Average Fuel Economy.
Purpose: CAFE norms improve vehicle fuel efficiency and reduce vehicular emissions.
MoRTH: Stands for Ministry of Road Transport and Highways.
Super Credits: Encourage production of cleaner vehicles such as EVs and hybrids.

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