CAFE III and ADAS Norms to Shape Auto-Component Growth

India’s third phase of Corporate Average Fuel Efficiency (CAFE III) norms is scheduled from 1 April 2027 to 31 March 2032. The norms are framed by the Bureau of Energy Efficiency under the Ministry of Power and apply to M1 category passenger vehicles with seating capacity of up to nine persons and a gross vehicle weight of up to 3,500 kg. The heavy vehicle Advanced Driver Assistance Systems (ADAS) mandate is linked to new models from 1 April 2026 and to existing production models from 1 October 2026.

CAFE Norms in India

CAFE norms are fuel-efficiency regulations for vehicle fleets, and they are used to limit average carbon dioxide emissions from passenger vehicles. Under CAFE III, automakers are required to reduce average fleet emissions from about 113 g/km at the end of CAFE-II in FY27 to 78.9 g/km by FY32. The framework is designed for energy-efficient vehicles and lower crude oil dependence.

Super Credit Scheme and Vehicle Technologies

CAFE III includes a super credit scheme that assigns multipliers to selected vehicle technologies. Battery Electric Vehicles receive a 3.0 multiplier, Plug-in Hybrids receive a 2.5 multiplier, and Strong Hybrids receive a 1.6 multiplier. Such multipliers are used in regulatory accounting for fleet compliance.

ADAS Mandate for Heavy Vehicles

India’s 2026 ADAS mandate covers buses, trucks, and large passenger vehicles. Mandatory systems include Advanced Emergency Braking System (AEBS), Driver Drowsiness and Attention Warning System, Lane Departure Warning System (LDWS), Blind Spot Information System (BSIS), and Moving Off Information System (MOIS). ADAS is a set of electronic safety technologies that assist drivers through sensors, cameras, radar, and software.

ADAS Market and Testing Infrastructure

The Indian ADAS market is valued at USD 1.15 billion in 2025 and is projected to reach USD 3.12 billion by 2031. The projected compound annual growth rate for 2026-2031 is 18.12 per cent. The Automotive Research Association of India inaugurated the country’s first ADAS Test City in Pune in September 2025 for validation under India-specific traffic conditions.

Important Facts for Exams

• CAFE stands for Corporate Average Fuel Efficiency.
• BEE functions under the Ministry of Power.
• M1 category passenger vehicles include vehicles with up to nine persons and a gross vehicle weight of up to 3,500 kg.
• AEBS, LDWS, BSIS, and MOIS are among the mandatory ADAS features for heavy vehicles in India.

Industry Context

ADAS and emission norms increase the content of electronics, software, sensors, and emission-control systems in vehicles. Bosch Ltd. is among the companies positioned around these regulatory changes in the Indian automobile sector.