🚗 Govt. Considers Relaxing Fuel Norms for Small Cars After Maruti Suzuki Push
In a major development that could reshape India’s compact car market, the Indian government is reportedly evaluating a proposal to relax Corporate Average Fuel Efficiency (CAFÉ) norms for small cars. This comes following strong lobbying by Maruti Suzuki, the country’s largest car manufacturer.
Sources close to the matter have revealed that the Ministry of Heavy Industries, in consultation with NITI Aayog and the Ministry of Road Transport, is reviewing the feasibility of easing fuel efficiency benchmarks that were previously set to push automakers toward electric and hybrid alternatives.
🏭 Why Is This Change Being Considered?
Maruti Suzuki, which dominates India’s entry-level car market, argues that:
Stricter fuel efficiency norms are making small cars costlier to produce.
The rules disincentivize affordable mobility and hinder growth in rural and low-income urban segments.
The regulatory push toward electrification may not be economically viable in the short term for mass-market consumers.
Relaxing these norms would help automakers maintain profitability in budget segments without immediate large-scale investments in EV or hybrid tech.
📊 What Are CAFÉ Norms?
CAFÉ norms require manufacturers to maintain a certain fleet-wide average fuel efficiency, with penalties imposed for non-compliance. These are part of India’s broader goals to curb vehicular emissions and reduce dependence on fossil fuels.
A relaxation could:
Allow automakers to continue producing internal combustion engine (ICE) cars without expensive upgrades.
Delay the transition to full electrification in the small car segment.
Spark concerns among climate advocates about backtracking on environmental commitments.
📈 Market Impact
If approved, this change:
Will likely revive demand in the small car segment, which has seen a slowdown due to price increases.
Could provide temporary relief for automakers like Maruti Suzuki and Hyundai.
Might impact India’s 2030 net-zero emission targets if not balanced with long-term green commitments.
❓ FAQ: Fuel Norm Relaxation for Small Cars in India
Q1. What are CAFÉ norms?
CAFÉ (Corporate Average Fuel Efficiency) norms regulate the average fuel efficiency across a carmaker’s fleet to reduce emissions and fuel consumption.
Q2. Why is Maruti Suzuki pushing for fuel norm relaxation?
Maruti argues that stringent norms raise the production cost of small cars, making them less affordable and threatening their market viability.
Q3. What impact will this policy shift have on consumers?
It may make small cars more affordable in the short term by lowering regulatory compliance costs passed on to buyers.
Q4. Is this move final?
As of now, the proposal is under discussion. Final approval would require inter-ministerial consensus and stakeholder inputs.
Q5. Will this delay India’s EV targets?
Critics believe it could slow EV adoption in the mass-market segment, although the government may counterbalance with other green mobility initiatives.
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Reported by Benny on June 27, 2025.
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