National Automobile Scrappage Policy is mutual win-win policy for all the stakeholders. The policy aims at creating an ecosystem for phasing out unfit and polluting vehicles from the Indian roads and to meet this objective state-of-the-art scrapping and recycling units are needed.

The policy will help in increasing Automobile sales, provide employment, reduce import cost, generate incremental GST revenue and help to solve the global shortage of semi-conductor chip. The policy provides an important link in creating circular economy (waste to wealth) for the country.  

The Ministry of Road Transport and Highways has recently launched the Voluntary Vehicle-Fleet Modernisation Program (Vehicle Scrapping Policy). This Policy is aimed at creating an ecosystem for phasing out old unsafe, polluting vehicles and replacing them with newer safe and fuel-efficient vehicles. The Ministry has also notified the Registered Vehicle Scrapping Facility (RVSF) Rules to enable setting up of modern vehicle scrapping facilities in India which can recycle the vehicles in an environment friendly manner.

The existing vehicle dismantling and recycling industry in India is unorganized and recycling of older vehicles is not done in an environment-friendly manner. This not only leads to inefficient resource management, but also non-realisation of the full value of high-strength steel alloys and recovery of valuable rare-earth metals. The existing ELV scrapping cycle has a low recovery percentage and many materials get wasted or are not properly recycled. As per unofficial industry estimates, the recovery percentage in India is about 70-75%, while global benchmarks for recovery from scrapped vehicle are in the range of 85-95%.

Since the prevailing processes in the unorganized sector for recycling/ scrapping are not carried out in an environment-friendly manner, it is the endeavour of this Ministry to promote setting up of RVSF, to enable use of environmentally-friendly processes in this regard. The Vehicle Scrapping Policy thereby creates such formal business opportunity & promote scientific recycling within the scrapping industry.

Source: PIB