New Delhi, July 23 -- The government's plan to give laggard carmakers an easy route to meet their fuel-efficiency targets retrospectively has split India's auto industry, according to four executives familiar with the development. Tata Motors Passenger Vehicles and JSW MG Motor India are up in arms, while the others are broadly in sync. The rift could delay changes to the ongoing Corporate Average Fuel Efficiency (CAFE) rules, even as the new regime is just nine months away.

The discord surfaced during the meeting of industry lobby group the Society of Indian Automobile Manufacturers (Siam) on Friday, where the two carmakers opposed the proposal to change the CAFE 2 rules, which have been in place since 2022, to give companies that misse...