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Fuel economy in India

Part of Global Fuel Economy Initiative 2021

Light-duty vehicle (LDV) sales have contracted in India since 2017, with 3.2 million sold in 2019. Nevertheless, India remains the fifth-largest LDV market. Average fuel consumption of new LDVs dropped from 6.9 litres of gasoline equivalent per 100 kilometres (Lge/100 km) in 2005 to 5.7 Lge/100 km in 2019, which is 20% below the global average. This is mainly attributable to a high share of diesel LDVs and an average LDV weight that is 24% lower than the global average.

Fuel economy has improved since 2005, though progress has somewhat stalled recently with fuel consumption of large cars increasing on average 6% per year since 2017, and fuel consumption of large and small SUVs/pick-ups growing 3.7% and 2.6%, respectively. In contrast, the medium car segment continues to see rapid improvements.

Slowing improvements may stem from a decreasing share of diesel powertrains, which are being replaced by gasoline vehicles. In 2017, diesel powertrains were 47% of LDV sales, and in 2019 were 40%, while gasoline powertrains grew to be 57% of LDV sales. Sales shares of electric, plug-in and hybrid vehicles remained negligible in 2019. Further, average LDV weight has increased 13% since 2005 in India, reaching 1 129 kg in 2019. City cars held a 55% sales share in 2019, while the share of SUVs/pick-ups grew from 17% in 2005 to 31% in 2019.

Since 2014, India imposed passenger vehicle fuel-efficiency standards. Once implemented in 2015, these standards mandated efficiency targets for new cars at the equivalent of 130 gCO2/km in 2017 and 113 gCO2/km in 2022. Fuel efficiency labelling for new vehicles has been mandatory since 2011.

As part of the National Electric Mobility Mission Plan (NEMMP) 2020, India developed the Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme in 2015. FAME was designed to accelerate the uptake of hybrids and electric vehicles through providing subsidies that reduce the upfront purchase price of these vehicles.

India’s National Mission on Electric Mobility was launched in 2018. Subsequently, the National E-Mobility programme was launched to promote public procurement of electric vehicles and deployment of charging infrastructure. In 2019, government adopted a scaled up FAME II scheme, with an outlay of USD 1.4 billion to be used for upfront incentives and for supporting the deployment of charging infrastructure. While the scheme was scheduled to end in 2022, it has now been extended until 2024.