India trims automaker fuel-efficiency penalties to Rs 2,728 crore
Change
India reduced the total penalty for automakers failing Corporate Average Fuel Efficiency (CAFE-2) targets to Rs 2,728 crore, applying a uniform Rs 37.5 lakh penalty per original equipment manufacturer for April–December FY23 and covering nine automakers for FY23–FY25.
Why it matters
The revision standardises how non-compliance is penalised and replaces the earlier per-vehicle formula with a single, enforceable charge per OEM. A government-maintained credit-debit registry and a Prime Minister’s Office-directed recovery mechanism mean manufacturers must either secure or buy efficiency credits or face enforced penalty collection.
Implications
- • Original equipment manufacturers' regulatory compliance teams must record and reconcile fuel-efficiency credits and deficits in the new credit-debit registry maintained by the designated authority.
- • OEMs' commercial or trading desks must establish processes to pool surplus credits within the specified three-year and two-year block periods and to sell credits to other manufacturers when needed.
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