PMO meets on CAFE-3 norms

The Prime Minister’s Office (PMO) held a meeting on Wednesday to review the proposed carbon emission norms for passenger vehicles slated to take effect from 2027, though no final decision was reached.

A senior government official who was part of the high-level meeting said that there was “no final decision yet”, on the contentious issue of draft Corporate Average Fuel Efficiency (CAFE)-3 norms which has divided small and big car makers.

Officials of the Ministry of Power, Bureau of Energy Efficiency, and Ministry of Heavy Industries were part of the meeting.

Speaking to reporters on the sidelines of a FICCI event, Minister for Heavy Industries H.D. Kumaraswamy said about the proposal, “We already had a meeting with stakeholders and Power Ministry. The Power Ministry, according to my information, has sent the proposal to the PMO.”

On the contents of the proposal, the Minister merely said, “whatever best way we have to encourage for the electric mobility, we are going to take.” 

The Bureau of Energy Efficiency recently circulated a revised draft of the CAFE III norms to the industry after the earlier version released in September last year triggered divisions among automakers with larger vehicle manufacturers opposing certain relaxations extended to small-car makers.

The latest proposal, which has been shared with car manufacturers but not yet made public, has removed the 3.0 g CO2/ km waiver for cars weighing upto 909 kg and with engine capacity not exceeding 1200 cc . It has also made the emission slope flatter. Against the initial 0.002 value for all five years, the new proposal is 0.00153 in year one, followed by an annual reduction so as to reach 0.00128 in the fifth year. This means that the permissible emissions for heavier vehicles are lower than before, while small cars get some relief.

Speaking at the 3rd FICCI National Conference on Electric Vehicles, Minister Kumaraswamy said, “electric mobility today is not merely a climate initiative; it is an industrial strategy, a manufacturing opportunity, a supply-chain recalibration, and a technological leap.”

Citing the progress of the ₹10,900 crore PM E-DRIVE scheme, Kumaraswamy stated that as of February 2026, more than 28 lakh electric vehicles have been sold under the scheme, including over 20 lakh electric two-wheelers and nearly 3 lakh electric three-wheelers. He added that electric three-wheelers have already achieved its target ahead of schedule and reached nearly 32% penetration. Over 14,000 electric buses too have been sanctioned across major cities under an allocation of ₹4,391 crore.