CAFE-III Norms Finalised: Maruti Suzuki, Hyundai, Tata Motors Welcome New Framework

The finalisation of CAFE-III norms after months of tussle over relief for small cars drew a positive response from leading automakers Maruti Suzuki, Hyundai Motor India and Tata Motors on Wednesday. The auto OEMs have welcomed the Centre's approach, while pointing to the recognition of multiple powertrain technologies, credit-based compliance as well as the the longer compliance structure under the new CAFE-III norms.

The first CAFE-III draft was released by the Bureau of Energy Efficiency (BEE), which operates under the Ministry of Power, in June 2024. Maruti subsequently sought separate relief for small cars. The September 2025 draft formally introduced the 3 g/km provision, triggering a sharp division within the industry. A further revised draft issued by the BEE in July this year removed the proposed small-car concession.

The final rules take effect from April 2027 and will remain applicable until March 2032.

India's largest carmaker and leading small-car seller Maruti Suzuki India (MSIL) welcomed the CAFE-III notification, describing it as a comprehensive regulation based on scientific data calculations and stakeholder and inter-ministerial consultations.

“The CAFE regulation is a central policy instrument which accelerates India’s decarbonisation and energy security journey in the mobility sector. We welcome and appreciate the CAFE-III notification for M1 passenger vehicles issued by the Government of India. It is a comprehensive regulation arrived at after scientific data calculations and detailed stakeholder and inter-ministerial consultation with ambitious targets for energy efficiency improvement and CO2 reduction. 

"The regulation recognizes the contribution of multiple powertrain technologies and fuels encouraging multi-faceted R&D and innovation. A credit/debit mechanism is an improvisation over the previous CAFE-II regulation. Maruti Suzuki is one of the front-runners in absolute efficiency performance in CAFE phases I and II and will continue its leadership in CAFE-III also," Rahul Bharti, Senior Executive Officer, Corporate Affairs, told ACKO Drive.

According to Hyundai Motor India, the final CAFE-III norms provide a clear long-term regulatory roadmap for the automotive industry. The company highlighted the 3+2-year compliance block structure, which it noted would enable manufacturers to undertake long-term product and technology planning with greater certainty.

“The final notification of CAFE-III norms is a positive step by the Government towards advancing sustainable mobility in India and presents a clear long-term roadmap for the auto industry. Hyundai Motor India Limited (HMIL) remains committed to complying with all applicable regulatory norms and meeting current and future CAFE requirements. The norms provide a clear and predictable regulatory roadmap through a 3+2 year compliance block structure, enabling manufacturers to undertake long-term product and technology planning with greater certainty. 

"The framework adopts a technology-neutral approach recognizing multiple pathways to improve fleet efficiency including electrification, alternative fuels and advanced fuel-saving technologies. HMIL has already committed to a green portfolio share of 50% plus over the next 4 to 5 years comprising of cleaner technologies like EVs, Hybrids, CNGs etc," said Tarun Garg, MD & CEO, Hyundai Motor India Limited.

Tata Motors, meanwhile, said that the framework would provide greater clarity and predictability for the industry, helping manufacturers plan investments and accelerate innovation. The company also appreciated the continued recognition of zero-emission technologies.

“The CAFE III framework is an important step in advancing India’s journey towards cleaner and more sustainable mobility. We welcome the Government’s consultative approach in developing a framework that combines ambitious fuel efficiency targets with market-based compliance mechanisms. Importantly, the continued recognition of zero-emission technologies reinforces the critical role of electrification in achieving India’s long-term decarbonisation objectives. The clarity and predictability provided by the framework will enable the industry to plan investments, accelerate innovation and offer customers an increasingly compelling range of cleaner mobility solutions. At Tata Motors, we remain committed to leading this transition through sustained investments in electric mobility and other technologies that can meaningfully reduce emissions," said Shailesh Chandra, MD & CEO, Tata Motors Passenger Vehicles Ltd.

Echoing similar sentiments, JSW Motors the notified CAFÉ 3 norms provide a framework for India's transition towards cleaner mobility, while recognising that electrification will involve multiple powertrain technologies.

"The government’s decision to support a range of clean and increasingly efficient technologies — including battery electric vehicles (BEVs), range-extended electric vehicles (REEVs) and plug-in hybrid electric vehicles (PHEVs) — will help accelerate fuel efficiency, drive technology adoption and increasingly de-carbonise passenger vehicles in the country. JSW Motors particularly welcomes the higher volume derogation factor of 3.0 for BEVs and REEVs, followed by 2.5 for PHEVs/eligible strong hybrids. This appropriately recognises the greater contribution of battery-led technologies while allowing other electrified powertrains to play a role in the transition," said Ranjan Nayak, CEO of JSW Motors.