Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Indian prime minister Narendra Modi, on Friday, officially launched automobile scrappage policy in the country at an investor summit in Gujarat through video conferencing. The summit invited investment for setting up vehicle scrapping infrastructure under the Voluntary Vehicle-Fleet Modernization Program or the Vehicle Scrapping Policy.


The policy could spur demand for new vehicles and push scrap generation in India. Amid a global thrust towards environmental sustainability, the Indian government expects the scrappage policy to develop a circular economy, thus creating wealth from waste.


During the launch, Modi stated India imported Rs23,000mn worth of scrap last year. Against this backdrop, the policy could help the country achieve self-reliance. It also entails an investment of Rs100,000mn. For the implementation of the scrappage policy, the fitness of the vehicle would take precedence overage. The government plans to establish such fitness centers across India for this purpose. The owner of the scrapped vehicle will receive a certificate, which will earn rebates on road tax and registration charges.


Scrapping facilities in India for vehicles are unorganized. Thus, the recovery of metal from scrapped vehicles is lower. The government-established centers would enable a better recovery of metals, including the rare earth metals.

The policy is proposed to be implemented for government-owned vehicles by April 2022, heavy commercial vehicles by 2023, and personal vehicles by 2024.   

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