Vehicle Scrappage Policy

India’s Vehicle Scrappage Policy took effect in April 2022. The objective of the government-funded programme is to phase out old passenger and commercial vehicles and thereby reduce urban air pollution, increase passenger and road safety, and stimulate vehicle sales. 
 
 The policy requires passenger vehicles older than 20 years and commercial vehicles older than 15 years to pass a “fitness and emissions test” to keep their registration. Vehicles failing the mandatory test are defined as end-of-life vehicles, lose their registration certificate and are recommended to be scrapped. The policy further introduces incentives to scrap old vehicles, including discounts on the purchase of new vehicles against a scrappage certificate. 
 
 It could bring about two important changes to India's automotive sector: First, it establishes norms that regulate vehicle phase-out on a national level with the potential to improve knowledge about vehicle retirements and to harmonise registration rules across states. Second, the policy has the potential to accelerate the formalisation of vehicle scrappage and recycling. A prerequisite for successful implementation of this policy is the availability of testing centre and scrappage yard capacity. 

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