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New details on India’s much-awaited auto scrappage policy reveal that Indian automakers will offer a 5pc rebate to car owners who scrap their old vehicles to buy new, according to local media.


India’s Minister for Road Transport, Highways and MSMEs Nitin Gadkari said automakers will provide the rebate on the purchase of a new car on scrapping an old car, while speaking on the features of the vehicle scrappage policy that was announced during the Union budget for FY2021-22 on Feb 1.


The scrappage scheme proposes a fitness test for all personal vehicles beyond the age of 20 and commercial vehicles that are more than 15 years old will require a fitness test. Old vehicles that fail the test and are found polluting will be heavily fined and impounded. The government is working on a public-private partnership (PPP) model to operate the fitness test and scrapping centres.      


Indian automobile industry’s revenue is expected to increase by 30pc in a year with the implementation of the scheme, according to the minister, while exports are expected to rise more than 100pc from the current levels. The policy is expected to increase the availability of steel, aluminium, rubber and plastic scrap in the country, which could reduce manufacturing cost by 30-40pc, he added.

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