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The government notified the third phase of Corporate Average Fuel Economy (CAFE-III) norms for passenger vehicles on 30 September 2026, to apply from 1 April 2027 to 31 March 2032. The norms seek a fuel consumption improvement of over 16 percent, tightening the fleet average benchmark from 3.996 litres per 100 km in 2027-28 to 3.3273 litres per 100 km in 2031-32, and raise the reference vehicle weight used to set targets from 1,082 kg to 1,229 kg. Battery electric, range extended, plug-in hybrid and flex-fuel vehicles get volume based super credits, and manufacturers can trade or carry forward compliance credits through the Bureau of Energy Efficiency.