TL;DR
India has removed a small car fuel efficiency exemption, compelling automakers to boost electric and hybrid vehicle sales to meet stricter emission targets by 2032.
India has officially withdrawn a planned exemption for small cars from its upcoming fuel-efficiency regulations. This move, detailed in a recent 41-page draft reviewed by Reuters, is set to significantly increase pressure on all automakers to accelerate the sales of electric and hybrid vehicles across the country. The original exemption, which would have offered leniency to petrol cars weighing 909 kg or less, was reportedly seen by manufacturers like Tata Motors and Mahindra & Mahindra as unfairly benefiting predominantly one company, Maruti Suzuki, which holds a vast majority of the small-car market.
The Ministry of Power has not only eliminated this carve-out but also tightened other parameters within the new regulations. These updated rules, slated for implementation from April 2027 for a five-year period, aim to reduce excessive compensation for vehicle weight and create a more equitable playing field between manufacturers of light and heavy vehicle fleets. The revised framework introduces a "substantially steeper reduction pathway" for emissions, pushing for more realistic and impactful efficiency gains.
Under the new policy, companies selling a higher number of EVs and plug-in hybrids will be rewarded through a credit system, and pooling of fuel-consumption performance between manufacturers will be permitted. Non-compliance could lead to penalties of up to $550 per car. The overarching goal is to reduce average fleet emissions to approximately 100 grams/km by March 2032, a notable decrease from the current 114 grams/km. This figure could potentially drop to as low as 76 grams/km if electric models constitute 11% of total car sales by 2032.
