Small Cars in the Spotlight as India Rethinks Efficiency Standards

India’s government is thinking about loosening fuel efficiency requirements for small cars that weigh less than 1,000 kg, according to people close to the policy talks. If this change goes through, it could make life easier for carmakers and keep small, affordable cars within reach for many buyers.

 

Here’s what’s going on:

 

The current rules set a single fuel efficiency standard for all cars, but the government is now debating whether lighter, smaller cars should have less strict targets. This would mostly affect cars that are already more fuel efficient than bigger vehicles.

 

The new rules, called CAFE III, are supposed to kick in from April 2027 and would be much tougher than the current ones. Carmakers say it’s hard to meet these stricter standards, especially since electric cars aren’t yet selling in big numbers.

 

Meetings between government officials and auto industry leaders have focused on whether to base the new standards on car weight, engine size, or length. No final decision has been made, but the Bureau of Energy Efficiency is leading the talks and asking carmakers for feedback.

 

The auto industry argues that if the rules get too strict, it could make small cars more expensive or even push some models out of the market. That’s a big deal in India, where small cars are a mainstay for first-time buyers and families.

 

This debate really highlights a challenge for India: how to keep pushing for cleaner, greener vehicles while still making sure cars stay affordable and practical for most people.

 

Source: Economic Times Brand Equity, Economic Times Auto, Shakti Foundation