India’s Emission Rules Spark Automaker Rift

India’s draft Corporate Average Fuel Efficiency (CAFE-III) norms have ignited a sharp divide among automakers. While the new rules aim to tighten fuel efficiency and CO₂ targets for passenger vehicles, a proposed concession for small cars has triggered controversy — with Hyundai, Tata Motors, Mahindra & Mahindra, and JSW MG Motor urging the government to scrap it.

The Concession at the Heart of the Debate

Under the draft, vehicles under 909 kg, shorter than 4 meters, and with engines below 1,200cc would face lenient emission requirements. Industry data suggests this clause would disproportionately benefit Maruti Suzuki, India’s largest small-car manufacturer.

• Critics’ view: The concession risks tilting the market toward petrol cars, undermining India’s push for electrification.
• Maruti’s defense: The company argues small cars naturally consume less fuel and emit less CO₂, and notes that similar provisions exist in Europe, the U.S., China, Korea, and Japan.

Automakers’ Positions at a Glance

Automaker	Position	Key Arguments	Strategic Implication
Hyundai	Opposes	Concessions unfairly benefit Maruti Suzuki; undermines EV transition	Wants stricter, uniform rules to support EV investments
Tata Motors	Opposes	Small-car leniency distorts competition; hurts companies investing in EVs	Protects its EV leadership in India
Mahindra	Opposes	Rules tilt market toward petrol cars; slows electrification	Seeks level playing field for larger SUVs and EVs
MG Motor (JSW MG)	Opposes	Concessions weaken India’s climate credibility; unfair advantage to Maruti	Aligns with global EV positioning
Maruti Suzuki	Supports	Small cars naturally emit less; similar concessions exist globally	Protects dominance in affordable petrol cars; delays EV pressure

Broader Implications

• Policy tension: India must balance affordability (small cars for mass consumers) with climate goals (EV adoption).
• Industry split: EV-focused automakers vs. small-car champion Maruti Suzuki.
• Global optics: Concessions could weaken India’s credibility in climate negotiations, especially as it positions itself as an EV hub.

Editorial Takeaway: The clash over CAFE-III norms is more than a technical dispute — it’s a battle for India’s automotive future. Policymakers now face a critical choice: protect affordability or accelerate electrification. The outcome will shape not just the auto industry, but India’s climate credibility on the global stage.