Small Cars to Get Pricier: Govt Revokes Fuel Efficiency Exemption

• Indian government withdraws proposed fuel efficiency exemption for small cars (under 909 kg) in CAFE-III regulations.
• Decision follows protests from other automakers like Tata Motors and Mahindra & Mahindra, who argued it unfairly benefited Maruti Suzuki.
• Maruti Suzuki, which dominates India's small car market, will be significantly impacted as many entry-level models relied on this relief.
• New rules, effective April 2027, aim to reduce fleet-average CO2 emissions to 91.7 grams CO2/km by 2032, with penalties for non-compliance.
• The move pushes all manufacturers to accelerate sales of electric and hybrid vehicles, aligning with India's green transport policy.