New Delhi, Dec. 18 -- India's auto industry is pushing the government to ease fuel efficiency rules and expand incentives for electric vehicles (EVs), even as it remains divided over concessions for small cars. The negotiations could shape the country's vehicle mix, technology investments, and competitiveness for the next decade.

Carmakers are particularly unsettled by the September draft of the corporate average fuel efficiency (CAFE) rules, which tighten efficiency targets, introduce annual improvement milestones, and revise incentives across powertrains, including EVs, hybrids, and flex-fuel vehicles.

The Society of Indian Automobile Manufacturers (Siam) is preparing to raise these concerns with the Union heavy industries ministry, w...