Union Road Transport and Highways Minister Nitin Gadkari outlined the significant economic and environmental potential of India’s vehicle scrapping policy, revealing that the initiative could generate lakhs of jobs while substantially reducing metal imports and carbon emissions.
Speaking at the 65th SIAM Convention, Gadkari presented comprehensive data on the Automated Testing Stations (ATS) and Registered Vehicle Scrapping Facilities (RVSF) network, emphasizing the policy’s importance for India’s economy and environmental goals.
Current Scrapping Performance
According to the minister’s data, approximately 3 lakh vehicles were scrapped in August 2025, with government vehicles accounting for 1.03 lakh units and private vehicles making up the remaining 1.97 lakh units. The scrapping rate has reached 16,800 cars monthly, supported by private sector investment of Rs 27 crore in scrapping infrastructure.
The initiative has already generated significant results, with 3.76 lakh tonnes of metals recovered from scrapped vehicles, representing 6% of total metal recovery potential.
Economic Benefits
Gadkari highlighted the policy’s potential to reduce India’s dependence on metal imports, particularly noting that 60 lakh tonnes of steel imports could be substituted through increased vehicle scrapping. The minister emphasized that enhanced scrapping rates would enable 33% raw material reutilization, directly impacting production costs and making manufacturing more competitive.
The scrapping certificates issued under the policy provide discount benefits to consumers purchasing new vehicles, creating a win-win scenario that incentivizes voluntary scrapping while boosting new vehicle sales.
Revenue and Industrial Impact
The minister revealed that increased vehicle scrapping could generate 40% GST benefits for the government through higher demand for new vehicles. This increased demand would subsequently reduce production costs due to economies of scale, making vehicles more affordable for consumers.
The policy is expected to reduce aluminum imports while making the metal cheaper domestically. Additionally, precious metals recovered from scrapped vehicles could address supply chain challenges, including semiconductor and rare earth material shortages that have plagued the automotive industry.
Environmental Significance
From an environmental perspective, the scrapping initiative could achieve CO2 reduction equivalent to planting 26 crore trees, with total reduction estimated at 6,353 kilo tonnes. This substantial environmental benefit aligns with India’s climate commitments and sustainable development goals.
Gadkari called for expanded infrastructure, requesting more scrapping facilities, fitness testing centers, and driving training centers to support the policy’s growth. The comprehensive approach aims to create an integrated ecosystem supporting vehicle lifecycle management while generating substantial economic and environmental benefits.