Policies tear auto sector apart

The industry remains deeply divided over key government proposals to improve fuel efficiency and cut vehicular emissions

- Manas Pimpalkhare

The government's draft CAFE 3 norms proposed big concessions for smaller, lighter cars.

India’s automobile industry remains deeply divided over key government proposals to improve fuel efficiency and cut vehicular emissions, making consensus hard to build ahead of the new norms taking effect in April 2027.

The government's draft CAFE 3 norms (corporate average fuel efficiency), which aim to slash fleet-wide carbon dioxide emissions by pushing manufacturers to make more of hybrids and electric vehicles (EVs), proposed big concessions for smaller, lighter cars.

Cars shorter than four metres, weighing less than 909kg and powered by sub-1200 cc engines will get an advantage of 3 grams while calculating carbon dioxide (CO2) emissions for the CAFE 3 rules, the Bureau of Energy Efficiency (BEE) proposed in September.

This was seen as a favour to the nation's biggest carmaker Maruti Suzuki India Ltd, a market leader in small cars which sells popular brands such as Alto and Wagon-R, prompting protests from rivals such as Tata Motors Passenger Vehicles Ltd.

Shailesh Chandra, managing director of Tata Motors Passenger Vehicles—and president of industry lobby Siam (Society of Indian Automobile Manufacturers)—said in November that there was “no justification’ for any relaxation in the next phase of emission norms for small cars.

He further warned that redefining small cars based on weight rather than the current classification based on length and engine size would incentivize unsafe designs.

“We do not support any move to include weight in the definition of small car. Such an arbitrary criteria would conflict with one of the country’s most critical imperative that is safety,” Tata Motors’ Chandra said.