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Carmakers have begun approaching the Prime Minister's Office (PMO) over the proposed weight-based relaxations for small cars under the draft CAFE-III norms. While Tata Motors Passenger Vehicles (TMPV) and JSW MG Motor India have raised concerns over the proposed threshold of up to 909kg, Maruti Suzuki India, which supports weight-linked concessions for small cars, is also planning to make its representation now.
Industry representations and Maruti’s next move
The development comes following detailed representations made by the carmakers to the Ministry of Power, the Ministry of Heavy Industries, and the Ministry of Road Transport and Highways.
The CAFE framework is led by the Ministry of Power through the Bureau of Energy Efficiency (BEE), with the Ministry of Road Transport and Highways responsible for testing and enforcement under the Central Motor Vehicle Rules (CMVR), and the Ministry of Heavy Industries involved as a key stakeholder.
A source told Moneycontrol that Maruti Suzuki is preparing to escalate the matter with the PMO to present its side. "Small cars are given weight-based relaxations in several international markets," the source said, adding that many original equipment manufacturers (OEMs) are spreading misinformation on the subject of Corporate Average Fuel Efficiency (CAFE).
Also Read: Maruti Suzuki introduces WagonR swivel seat, pilots accessibility feature in 11 cities
Moneycontrol sent queries to Maruti Suzuki, Tata and JSW MG seeking comments. They did not respond until the time of publication.
Tata and JSW MG write to PMO
Earlier this week, Tata and JSW MG wrote separate letters to the PMO raising concerns regarding the draft CAFE-III proposal, which introduces relaxations for cars with an unladen mass of up to 909kg. Moneycontrol has reviewed the correspondence.
"India's ability to innovate and leapfrog into technologies of the future is now starting to bear fruit, with electric vehicle (EV) adoption growing to reach nearly 5% in passenger cars. In the coming years, with continued policy stability and focus, India can become one of the leading manufacturers and users of zero-emissions vehicles," Tata said in its letter.
"In this context, we would like to highlight that the provision to grant relaxations/exemptions for petrol vehicles up to 909kg weight not exceeding 1,200cc and length not exceeding 4,000mm, may result in diluting the focus on adoption of sustainable technologies," it added.
OEMs flag concerns on EV adoption, safety and competition
Tata and JSW MG, in their respective letters, argued that CAFE targets are defined at the OEM portfolio level to encourage manufacturers to adopt cleaner and more sustainable technologies across their line-ups. They contended that extending relaxations to a specific sub-segment of vehicles weakens this objective, as it reduces the incentive for OEMs to invest in technologies such as EVs, thereby diluting the broader national push towards EV adoption.
Also Read: Maruti WagonR crosses 35 lakh production in India, joins Alto and Swift among few models
According to the carmakers, linking relaxations to vehicle weight could create unintended incentives to reduce mass in ways that may compromise safety-related features. They pointed out that this could reverse recent gains made in improving vehicle safety standards, noting that no vehicles at or below the proposed weight threshold currently carry a Bharat NCAP safety rating.
The carmakers also stated that the proposed weight cut-off could distort competition by effectively defining a category in which a single manufacturer (Maruti Suzuki) commands an overwhelming share (95%) of the market. They added that such a change would disadvantage OEMs that have structured their products around the long-standing definition of small cars, which for nearly two decades has been based on vehicle length and engine displacement rather than weight.
"... we humbly request the government to not create any special category of cars basis size or weight for the purpose of providing concessions in CAFE, as it contradicts movement towards zero emissions technologies, vehicle safety, and a level playing field. We would like to humbly request that no relaxation in emission should be provided for cars with an unladen mass up to 909kg. We further submit that the focus on accelerated EV adoption should continue to be reinforced in the CAFE-III norms," Tata said.
Similarly, JSW MG, in its letter, also requested the government to consider retaining the existing approach under CAFE-III without introducing a separate category of passenger vehicles (PVs) based on vehicle weight. "A uniform, predictable and technology-neutral regulatory framework would continue to support India's clean mobility ambitions, investment momentum and long-term transition towards zero-emission vehicles," the carmaker said.
Industry is divided over weight-based concessions
While Tata, JSW MG, Mahindra, Hyundai and Kia are firmly against special weight-based concessions under CAFE-III, Maruti Suzuki, Toyota, Honda and Renault have supported the idea of concessions.
Maruti Suzuki has defended the case for structured relaxations for small cars under the draft CAFE-III norms, rejecting the suggestion that such provisions are arbitrary. On December 1, the company said that more than 90% of the global automobile market follows differentiated fuel-efficiency frameworks for smaller and lighter vehicles.
Also Read: Tata Sierra SUV records 70,000 bookings on day one, 1.35 lakh customers show interest
The company pointed out that China provides relaxations for cars weighing up to around 1,090kg, Europe below 1,115kg, and Korea at 1,100kg, while Japan follows a continuous weight-based curve where efficiency targets tighten progressively. The US, it added, uses a footprint-based system of around 41 square feet.
What the draft CAFE-III proposes
The CAFE-III regulations are slated to come into effect from April 1, 2027, and will remain applicable until March 31, 2032. Under the draft, vehicles with an unladen mass of up to 909kg, engine capacity of up to 1,200cc and length not exceeding 4,000mm will be eligible for a relaxation in fleet-average calculations. Such models can receive a reduction of 3g/km in manufacturer-declared carbon dioxide (CO2) emissions, subject to a cumulative cap of 9g/km per model in each reporting period.
Currently, CAFE-II requires OEMs to meet a fleet-average CO2 target of around 113g/km. The September 2025 draft of CAFE-III replaces this fixed limit with an annual fuel-consumption formula linked to average fleet weight, resulting in tighter targets that vary by portfolio mass. An earlier draft issued in June 2024 had proposed a fixed cap of 91.7g/km of CO2, which was subsequently dropped in favour of the weight-linked approach.
Industry representations and Maruti’s next move
The development comes following detailed representations made by the carmakers to the Ministry of Power, the Ministry of Heavy Industries, and the Ministry of Road Transport and Highways.
The CAFE framework is led by the Ministry of Power through the Bureau of Energy Efficiency (BEE), with the Ministry of Road Transport and Highways responsible for testing and enforcement under the Central Motor Vehicle Rules (CMVR), and the Ministry of Heavy Industries involved as a key stakeholder.
A source told Moneycontrol that Maruti Suzuki is preparing to escalate the matter with the PMO to present its side. "Small cars are given weight-based relaxations in several international markets," the source said, adding that many original equipment manufacturers (OEMs) are spreading misinformation on the subject of Corporate Average Fuel Efficiency (CAFE).
Also Read: Maruti Suzuki introduces WagonR swivel seat, pilots accessibility feature in 11 cities
Moneycontrol sent queries to Maruti Suzuki, Tata and JSW MG seeking comments. They did not respond until the time of publication.
Tata and JSW MG write to PMO
Earlier this week, Tata and JSW MG wrote separate letters to the PMO raising concerns regarding the draft CAFE-III proposal, which introduces relaxations for cars with an unladen mass of up to 909kg. Moneycontrol has reviewed the correspondence.
"India's ability to innovate and leapfrog into technologies of the future is now starting to bear fruit, with electric vehicle (EV) adoption growing to reach nearly 5% in passenger cars. In the coming years, with continued policy stability and focus, India can become one of the leading manufacturers and users of zero-emissions vehicles," Tata said in its letter.
"In this context, we would like to highlight that the provision to grant relaxations/exemptions for petrol vehicles up to 909kg weight not exceeding 1,200cc and length not exceeding 4,000mm, may result in diluting the focus on adoption of sustainable technologies," it added.
OEMs flag concerns on EV adoption, safety and competition
Tata and JSW MG, in their respective letters, argued that CAFE targets are defined at the OEM portfolio level to encourage manufacturers to adopt cleaner and more sustainable technologies across their line-ups. They contended that extending relaxations to a specific sub-segment of vehicles weakens this objective, as it reduces the incentive for OEMs to invest in technologies such as EVs, thereby diluting the broader national push towards EV adoption.
Also Read: Maruti WagonR crosses 35 lakh production in India, joins Alto and Swift among few models
According to the carmakers, linking relaxations to vehicle weight could create unintended incentives to reduce mass in ways that may compromise safety-related features. They pointed out that this could reverse recent gains made in improving vehicle safety standards, noting that no vehicles at or below the proposed weight threshold currently carry a Bharat NCAP safety rating.
The carmakers also stated that the proposed weight cut-off could distort competition by effectively defining a category in which a single manufacturer (Maruti Suzuki) commands an overwhelming share (95%) of the market. They added that such a change would disadvantage OEMs that have structured their products around the long-standing definition of small cars, which for nearly two decades has been based on vehicle length and engine displacement rather than weight.
"... we humbly request the government to not create any special category of cars basis size or weight for the purpose of providing concessions in CAFE, as it contradicts movement towards zero emissions technologies, vehicle safety, and a level playing field. We would like to humbly request that no relaxation in emission should be provided for cars with an unladen mass up to 909kg. We further submit that the focus on accelerated EV adoption should continue to be reinforced in the CAFE-III norms," Tata said.
Similarly, JSW MG, in its letter, also requested the government to consider retaining the existing approach under CAFE-III without introducing a separate category of passenger vehicles (PVs) based on vehicle weight. "A uniform, predictable and technology-neutral regulatory framework would continue to support India's clean mobility ambitions, investment momentum and long-term transition towards zero-emission vehicles," the carmaker said.
Industry is divided over weight-based concessions
While Tata, JSW MG, Mahindra, Hyundai and Kia are firmly against special weight-based concessions under CAFE-III, Maruti Suzuki, Toyota, Honda and Renault have supported the idea of concessions.
Maruti Suzuki has defended the case for structured relaxations for small cars under the draft CAFE-III norms, rejecting the suggestion that such provisions are arbitrary. On December 1, the company said that more than 90% of the global automobile market follows differentiated fuel-efficiency frameworks for smaller and lighter vehicles.
Also Read: Tata Sierra SUV records 70,000 bookings on day one, 1.35 lakh customers show interest
The company pointed out that China provides relaxations for cars weighing up to around 1,090kg, Europe below 1,115kg, and Korea at 1,100kg, while Japan follows a continuous weight-based curve where efficiency targets tighten progressively. The US, it added, uses a footprint-based system of around 41 square feet.
What the draft CAFE-III proposes
The CAFE-III regulations are slated to come into effect from April 1, 2027, and will remain applicable until March 31, 2032. Under the draft, vehicles with an unladen mass of up to 909kg, engine capacity of up to 1,200cc and length not exceeding 4,000mm will be eligible for a relaxation in fleet-average calculations. Such models can receive a reduction of 3g/km in manufacturer-declared carbon dioxide (CO2) emissions, subject to a cumulative cap of 9g/km per model in each reporting period.
Currently, CAFE-II requires OEMs to meet a fleet-average CO2 target of around 113g/km. The September 2025 draft of CAFE-III replaces this fixed limit with an annual fuel-consumption formula linked to average fleet weight, resulting in tighter targets that vary by portfolio mass. An earlier draft issued in June 2024 had proposed a fixed cap of 91.7g/km of CO2, which was subsequently dropped in favour of the weight-linked approach.
