Siam Scrambles as CAFE-3 Plan Cracks

Industry body to restart dialogue after consensus crumbles

- Nehal Chaliawala & Ayaan Kartik

A brewing dispute among top automakers threatens to complicate the rollout of India's next wave of emissions standards, landing the industry's lobby group at a crossroads after its largest member reversed its stance on the upcoming regulations.

The Society of Indian Automobile Manufacturers (Siam) had previously agreed on the emissions standards, submitting a consensus proposal to the government in December 2024 regarding the third edition of so-called Corporate Average Fuel Efficiency (CAFE) norms.

The rules, set to take effect from April 2027, aimed to slash the average carbon dioxide (CO2) emissions of new passenger vehicles. The proposed target is a fleet-wide average of 91.7 grams of CO2 per km for a typical vehicle weighing around 1,170 kg. However, differences have cropped up since then.

CAFE norms set maximum average emissions for all cars a manufacturer sells, pushing them to produce more fuel-efficient vehicles.

"Of late, we have seen certain manufacturers have formed a different view (on CAFE-3)," said Shailesh Chandra, president of Siam, and managing director of Tata Motors' passenger vehicles business.