Union Minister of Road Transport and Highways, Nitin Gadkari, announced on Tuesday that passenger and commercial vehicle manufacturers have agreed to provide discounts on new vehicle purchases when buyers scrap their old vehicles and present a valid Certificate of Deposit.
This decision was made during a meeting chaired by the minister with CEOs from the Society of Indian Automobile Manufacturers Association (SIAM), where key issues affecting the auto industry were discussed.
On social media platform X, Mr. Gadkari shared, “I am pleased to announce that several commercial and passenger vehicle manufacturers have agreed to offer discounts on new vehicle purchases in exchange for scrapping older vehicles with a valid Certificate of Deposit. This initiative will significantly advance our Circular Economy efforts, ensuring that cleaner, safer, and more efficient vehicles populate our roads.”
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He also praised the automobile manufacturers for participating in the Vehicle Fleet Modernisation Programme.
India’s leading automobile companies are expected to offer a discount ranging from 1.5% to 3.5% for buyers who scrap their old vehicles in favor of purchasing new ones.
Last year, the minister emphasized the need for 1,000 vehicle scrapping centers and 400 automated fitness test centers across the country.
Highlighting the benefits of the National Vehicle Scrappage Policy, Mr. Gadkari stated that India has the potential to become a scrapping hub in South Asia. He emphasized that the circular economy is crucial and will generate employment opportunities within the country.
Prime Minister Narendra Modi launched the National Vehicle Scrappage Policy in August 2021, aiming to phase out unfit and polluting vehicles and promote a circular economy.
The vehicle scrappage policy took effect on April 1, 2022. Under this policy, the Centre announced that states and Union Territories (UTs) would offer up to a 25% tax rebate on road tax for vehicles purchased after scrapping old ones.
Introduced in the Union Budget 2021-22, the policy mandates fitness tests for commercial vehicles after 15 years, while personal vehicles must undergo testing after 20 years. The policy aims to phase out older vehicles that contribute more to pollution.