India 2026 Car Regulations: BS7, CAFE III, Scrappage Rules Explained

February 1, 2026 Lucas Fernandez – World Editor World

Okay, here’s a breakdown of the key information from the provided text, organized for clarity. I’ll focus on summarizing the main points of each section.

1. BS7 Emission Standards & Real-Time Pollution Monitoring

* Real-Time monitoring: Future cars will have onboard diagnostics acting like a “live doctor,” constantly monitoring pollution levels and alerting drivers to increasing emissions as the vehicle ages.
* Fuel Neutrality: BS7 standards will equalize emission limits for petrol and diesel vehicles, setting a limit of 60mg/km for NOx.
* Impact on Diesel: This will force diesel car manufacturers to invest in expensive filters and technology to meet the new standards, leading to the decline of affordable diesel car options.

2. CAFE III & The Push for Electric Vehicles

* CAFE III (corporate Average Fuel Efficiency): New standards starting in april 2027 require car companies to reduce the overall CO2 emissions of their entire fleet.
* Strict Targets: The target is 91.7 g/km of CO2, a significant reduction from current regulations.
* “Super Credits”: Companies can earn credits by selling electric vehicles (EVs). Each EV is counted as three zero-emission vehicles in the government’s calculations, helping offset emissions from larger, less efficient vehicles (like SUVs).
* EV/Hybrid Surge: This “credit” system is a major driver behind the increased availability of EVs and hybrids from various manufacturers (Maruti, Tata, etc.). Without these credits, selling petrol/diesel cars will become more tough.

3. Scrappage policy & Vehicle Fitness

* ELV Rules 2025: mandates the scrapping of old and unfit vehicles at certified facilities, eliminating the informal junk market.
* Fitness Tests: Cars older than 20 years (15 for commercial trucks) will require a rigorous fitness test by April 2025.
* Scrapping Incentives: If a vehicle fails the test, it must be scrapped at a Registered Vehicle Scrapping Facility (RVSF) within 180 days. Scrapping a car earns a “Certificate of Deposit” which provides:
* 5% discount on a new car.
* Road tax rebate of up to 25% on a new car.
* Goal: To turn old, polluting vehicles into a down payment for cleaner, safer cars.

Let me know if you’d like me to elaborate on any specific aspect or if you have any other questions.