According to sources, there is a recalculation of the penalties too, which comes to a total of around ₹2,700 crore now, from the previous calculation of around ₹8,800 crore. As per earlier calculations, the penalty was fixed at ₹10 lakh plus ₹25,000 per units manufactured if non-compliance of norms below 0.2 litres per 100km and ₹50,000/ car for violation beyond 0.2 litres/100km. But under the new calculation for April-December 2022-23, the penalty has been fixed to only ₹0.375 as standard for all OEMs, hence the difference in the amount.
Under the Corporate Average Fuel Efficiency (CAFE-2), Hyundai Motor India (HMIL) has the maximum number of penalties going up to around ₹3,000 crore, followed by Mahindra & Mahindra (M&M) at around ₹1,800 crore and Kia India at around ₹1,350 crore.
However, with the new calculation method, HMIL’s penalties under CAFE-2 come to a total of around 355 crore, and M&M’s at ₹224 crore and Kia’s at ₹337 crore. But, for companies like Honda Cars India, the total penalties has been raised to ₹885 crore from ₹458 crore earlier and Renault India at ₹505 crore from earlier ₹438 crore.
In a meeting held last week with Secretaries of MoRTH, MoP, Ministry of Heavy Industries (MHI), Ministry of Petroleum and Natural Gas (MoPNG), Principal Secretary-2 to Prime Minister, Shaktikanta Das has also suggested them to fast track the process so that a final proposal on CAFE-3 can go the Prime Minister.
In an earlier meeting, these Ministries failed to arrive at a clear accountability framework and the immediate trigger was a pointed query from Das on who imposed the penalties, who approved them, and crucially, who is responsible for recovering them.
“In this meeting also, the main discussions were around past penalties (of CAFE-2) and how to recover them from the OEMs (original equipment manufacturers). The Principal Secretary-2 has told all the Secretaries of the concerned Ministries to get a clarity among themselves too and come with a final consensus in the next meeting,” a source privy of the meeting told businessline.
The official said that decisions have been made that MoRTH will prepare a procedure to recover the penalties, and under that procedure Bureau of Energy Efficiency (BEE, under the Ministry of Power) will send the notices to the OEMs.
“The PMO has again asked these Ministries to fast track the process because fixing of CAFE-2 is important before moving to CAFE-3. Shaktikanta Das has told the Secretaries to hold meetings and follow up with each other on this process before the next PMO meeting,” the official added. The next date of the meeting is not decided yet.
The CAFE-3 standards are supposed to kick off from April 1, 2027 until March 31, 2032, and while companies including Maruti Suzuki India, Toyota Kirloskar Motor, Honda Cars India and Renault India are on one side supporting small cars, others including Tata Motors, Mahindra & Mahindra, Hyundai Motor India, Kia India, etc are supporting weight cut for the bigger vehicles in the norms.
Published on March 29, 2026