Nitin Gadkari : Vehicle scrappage policy in its final stages, to be revealed soon!

New Delhi (07/02/2020): According to Gadkari, Union Minister, Ministry of Road Transport and Highways of India, who was the chief guest at the Federation of Automobile Dealers Association’s (FADA) 11th Auto Summit 2020, the vehicle scrappage policy is in its final stages and is slated to “come out in 15 days to one month.” He also said the Kandla port could be used to bring old scrapped vehicles from other countries, a move which will help the India automotive and other industries to recover important metals and reduce manufacturing / import cost.

It may be recollected that India Auto Inc was awaiting announcement of the vehicle scrappage policy in the Union Budget 2020-21 but it was not to be. Later, at a media briefing after the Budget, FM Sitharaman has said that such a policy for scraping old vehicles is under work, and will be announced once the specific ministries “fine-tune it”. “Scrappage policy is in the works … I would wait for the concerned ministries also to fine-tune everything and tie up the loose ends and then come to a stage where it can be announced by the ministry,” said Sitharaman.

In October 2019, apex industry body SIAM had welcomed the draft guidelines released by the Ministry of Road Transport & Highways (MoRTH) for setting up of authorised vehicle scrappage facilities in the country.

As per the government estimates, over 28 million end-of-life vehicles or ELVs (older than March 31, 2005) across categories will be ready to be discarded by April 2020. This would translate into a massive opportunity for players in the organised scrappage and recycling industry.

The Indian automobile industry, which is currently weathering one of the worst downturns in its history, has been urging the government to introduce a vehicle scrappage policy since several months now. Typically, a scrappage policy will also incentivise owners of old vehicles to dispose them off in a proper manner.