India’s car‑centric CAFE norms face criticism for overlooking two‑ and three‑wheelers that dominate urban mobility. Experts warn real‑world air‑quality gains require broader policy focus beyond passenger cars.
29 Jan 2026 | 318 Views | By Prerna Lidhoo & Darshan Nakhwa & Anurag Chaturvedi & Mukul Yudhveer Singh
India’s corporate average fuel efficiency (CAFE) norms are overly car-centric and not aligned with the country’s mobility and air-quality realities, a senior member of the Commission for Air Quality Management (CAQM) said on Wednesday.
“CAFE targets CO₂ (emissions) and fuel efficiency. It is designed for decarbonisation,” Dr Virinder Sharma, Member ...
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India’s corporate average fuel efficiency (CAFE) norms are overly car-centric and not aligned with the country’s mobility and air-quality realities, a senior member of the Commission for Air Quality Management (CAQM) said on Wednesday.
“CAFE targets CO₂ (emissions) and fuel efficiency. It is designed for decarbonisation,” Dr Virinder Sharma, Member (Technical) at CAQM, said at the Symposium on International Automotive Technology (SIAT) 2026. “But India’s air-quality problem is fundamentally about PM2.5 exposure, and that is where the gap lies.”
He said the impact of CAFE norms is concentrated on passenger cars, even though two-wheelers and three-wheelers dominate urban mobility, together accounting for nearly 70–80% of vehicles and a substantial share of on‑road emissions exposure.
“India is not a car-dominated country,” Sharma said. Policies that improve only new car efficiency will therefore have limited impact on air quality outcomes. “The air-quality story in India will not be decided by cars alone,” he further added.
India implemented CAFE Phase II norms in April 2022 and has release draft of the next phase, often referred to as CAFE 3, which will tighten fleet-average CO₂ targets for passenger vehicles over the next regulatory cycle. The rules are aligned with global efficiency frameworks and are expected to push greater electrification and lightweighting among carmakers.
The slow turnover of India’s vehicle fleet further dilutes the impact of efficiency norms, Sharma said. Older BS-I, BS-II and BS-III vehicles continue to operate alongside newer models, particularly outside large metropolitan regions. “Even today, a large number of old vehicles remain on the road,” he said. “Benefits from cleaner new vehicles arrive gradually, while exposure continues at street level.”
Sharma said this imbalance between policy focus and fleet composition weakens the effectiveness of car-centric efficiency norms. “Advanced technology in cars alone will not deliver India-scale air-quality improvement,” he said, adding that policy attention needs to extend to high-usage segments such as two-wheelers, three-wheelers and commercial fleets.
Despite these regulatory and fleet challenges, demand momentum remains strong. India’s passenger vehicle market recorded its highest-ever annual volumes in 2025, with wholesales of about 4.5 million units, according to industry data. Utility vehicles accounted for a growing share of sales, while two-wheelers remained the single largest mobility segment by volume and usage.
He also flagged the limitations of test-cycle-based regulations. Gains recorded under laboratory conditions do not always reflect real-world performance in Indian heat, dust and stop-go traffic. Real-world outcomes matter more than brochure technology, Sharma said.
He maintained that CAFE remains a useful tool for improving fleet efficiency and supporting long-term decarbonisation, but warned against treating it as a standalone solution for India’s air-quality crisis. “India needs affordable, durable, real-world solutions designed for its own fleet and usage patterns, not copy-paste global models,” he said.
Sharma said the priority for Indian cities should be reducing emissions and exposure where people live and work, before sequencing broader decarbonisation strategies. “It will be decided by what the majority of people are using on the road every day."