Indian Government Releases Draft Notification for Old Vehicle Scrappage

In a move to spur the growth of vehicle recycling agencies across the country and increase adoption of electric vehicles, the Road Transport and Highways Ministry has proposed a draft policy that buyers of newly purchased vehicle would not have to pay registration fees if they present a scrapping certificate of a previously owned vehicle of the same category issued by an authorised scrapping centre/agency, and the scrapping certificate has not been utilised for any other such cases in the past.

The Ministry has issued the draft amendment of the Central Motor Vehicle Rules for public consultation which, among other things, propose to provide benefits ranging up to Rs 40,000 on new purchases after scrappage of the old vehicle of a similar category, thus buying a new vehicle might just become cheaper. It has also proposed to revise charges for renewing registration certificates and newer registration marks. Fitness certificates for transport vehicles older than 15 years have to be renewed more frequently - every six months against one year under current norms.

To curb pollution & reduce dependence on imports -

The policy majorly focuses on curbing the vehicular pollution by scrapping old commercial vehicles more than 15 years that emit toxic gases in the environment and speeding up the generation of domestic scrap that could meet the increasing demand in the market and lowering the dependence on the scrap imports. India presently imports around 5 MnT steel scrap per annum. India's total domestic steel scrap demand likely to double to around 48-52 MnT by 2030, as per govt.

Mahindra & Tata Steel in the race -

The working on scrappage policy has been in the pipeline for several years now, while the market participants were waiting for its outcome, a few automakers have started taking proactive steps towards it. In a recent interaction with SteelMint, CERO recycling (a joint venture of Mahindra and MSTC Recycling Pvt Ltd has shared that after setting up of India’s first-ever Auto Shredded plant in Noida, Chennai unit is also likely to start operations in Q2-FY19.

Tata Steel has already forayed into scrap processing, with the official reports indicated that its Gurgaon unit will source, separate, shred and process scrap that can be used as a charge in steel production.