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BIR 2024

India – Vehicle Scrappage Policy- too little too late!

Shalini Goyal-Bhalla, Circular Economy Expert for the International Council for Circular Economy (ICCE) discusses the recently announced voluntary vehicle scrappage policy in India and how other factors must be considered to make it a worthwhile action.
India - Vehicle Scrappage Policy- too little too late! f four
Shalini Goyal-Bhalla

On the 1st Feb 2021, the Union budget presented by the Finance Minister, Mrs Nirmala Sitharaman, announced the voluntary vehicle scrappage policy. This policy’s objective is to phase out old and unfit vehicles to encourage fuel-efficient, environment-friendly vehicles, thereby reducing vehicular pollution.

Shalini believes more can be achieved from this scrappage policy; she said that India has a legacy of almost 24 million end of life vehicles (ELV) that need to be recycled. These vehicles are either old or unfit. A study says that old cars lead to ten times more emissions and old trucks almost eight times more emissions than the new ones. India could kill two birds with one stone by introducing a stringent vehicle recycling policy. It could lead to a reduction in steel imports and lower greenhouse gas emissions by recycling scrap. India imports almost 6 million tonnes of steel annually, which could be supplemented by recycling end of life vehicles.

In 2017, the Union Cabinet approved the National Steel Policy (NSP), with an aim to raise India’s steel production capacity to 300 million tonnes (MT) by the year 2030. From 110 MT in 2013-14, steel capacity increased to 134 MT in 2017-18. Central to the idea of implementing this policy was the availability of vast quantities of steel scrap in the country. The vehicle scrap policy is an extension of this policy and would help India recycle and reuse the scrap available at home.

When considering awareness of vehicle recycling in India, Shalini said that from a customer’s point of view, the valuation of old cars remains a grey area, in particular, that of recycling cars. Firstly, the valuation is not uniform all over the country. Secondly, several factors affect the value of an old vehicle, including the model of the car, whether it is in a working/non-working condition, whether it is rusting on the metallic parts, is it petrol or diesel engine, the current scrap market price and the condition of other non-metallic parts.

To encourage better awareness of how customers should recycle their cars, Shalini suggests that there needs to be massive awareness campaigns on educating customers on the ease of scrapping vehicles. This might encourage getting more vehicles in circulation, and it must be noted with more vehicles in circulation, that scrap dealers can easily provide Certificate of Destruction (COD) and deregistration of the vehicle with the concerned Regional Transport Authority (RTO).

She said that technologies like blockchain could help maintain transparency throughout the selling and scrap procedure which would also ensure strict adherence to all the necessary legal guidelines.

Shalini added that under the lack of stringent policies and standards for scrapping end-of-life vehicles, environment-friendly recycling efforts would be a challenge. And that the massive unorganised, informal and fragmented market would continue to dominate.

Although Shalini believes that the voluntary vehicle scrappage policy is a welcome move, it needs other parallel efforts to ensure that it meets its required objective.

If you would like to contact Shalini or find out more about the International Council for Circular Economy (ICCE), visit or write to her at