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Stricter fuel norms ahead? NITI Aayog recommends expanding CAFE norms to all vehicles
CAFE Norms: NITI Aayog recommends that Corporate Average Fuel Efficiency (CAFE) norms be implemented for all categories of vehicles. The suggestion comes as part of a broader push to reduce the country’s dependence on petrol and diesel, particularly in the backdrop of the West Asia crisis.
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Currently, more than 50 per cent of EV sales are concentrated in the three-wheeler segment. Image: AI-Generated
Reported By: Tarun Sharma
Written By: ZeeBiz WebTeam
Updated: Thu, Apr 30, 2026
09:00 PM IST
09:00 PM IST
ZeeBiz WebDesk
CAFE Norms: India may soon see stricter fuel efficiency rules across the entire automobile sector, with NITI Aayog recommending that Corporate Average Fuel Efficiency (CAFE) norms be implemented for all categories of vehicles. The suggestion comes as part of a broader push to reduce the country’s dependence on petrol and diesel, particularly in the backdrop of the West Asia crisis, which has highlighted vulnerabilities in fuel supply and pricing.
Push for wider adoption of fuel efficiency standards across segments
At present, fuel efficiency norms are not uniformly applied across all vehicle categories. NITI Aayog has proposed extending CAFE norms to cover two-wheelers, passenger vehicles, commercial vehicles and buses, in a bid to drive overall efficiency and lower fuel consumption.
Electric vehicle adoption remains uneven across segments
Currently, more than 50 per cent of EV sales are concentrated in the three-wheeler segment. In contrast, electric penetration in two-wheelers, light commercial vehicles (LCVs), heavy commercial vehicles (HCVs), four-wheelers and buses remains below 10 per cent.
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Target to scale up EV penetration significantly by 2035
To address this gap, NITI Aayog has outlined an ambitious target of increasing EV adoption across these segments from about 7 per cent at present to 65 per cent by 2035.
Lower costs and easier financing seen as key to boosting demand
The recommendations also stress the need to make electric vehicles more accessible. Suggested measures include providing loans at affordable interest rates, offering incentives, and reducing upfront costs for buyers.
What are CAFE-3 norms?
CAFE i.e. Corporate Average Fuel Economy are such rules under which car companies have to keep the average mileage and CO2 emissions of all their vehicles within the prescribed limit.
What will change in design and planning?
Until now, regulations were based on the size of cars, but CAFE-3 will focus on emissions across the entire fleet. This means that companies will have to reduce overall pollution, whether it's large SUVs or small cars. This will force companies to focus on more fuel-efficient and less polluting vehicles. Designs may also incorporate lighter materials and improved aerodynamics.
What is the effect on engine and fuel?
The government has asked companies to begin preparing for E25 fuel. E25 means adding 25 per cent ethanol to petrol. Additionally, there will be an emphasis on flex-fuel engines that can run on both petrol and ethanol. The government is also considering blending ethanol beyond 20 per cent in the future. Simply put, alternative fuels other than petrol and diesel will become more important in the future.
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