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India Aims To Double Vehicle Scrapping Rebates To 50% In 2025
India is home to more than 60 registered vehicle scrapping facilities. The government has proposed a significant increase in the rebate for new vehicle purchases when old vehicles with BS-II or earlier emission norms are scrapped. This proposal was confirmed through an official draft notification issued on January 24, 2025.
Currently, private vehicle owners receive a 25 percent rebate on motor vehicle tax when they scrap their old vehicles and buy new ones. For commercial vehicles, this rebate is capped at 15 percent. The new proposal aims to double these rebates to 50 percent for both categories.
Vehicle Scrapping Policy & Rebate Details
The Ministry of Road Transport and Highways (MoRTH) has outlined that the increased discount will apply to vehicles compliant with BS-I norms or those manufactured before these norms were introduced. Additionally, BS-II vehicles in medium and heavy private and transport categories will also qualify for this rebate.
The BS-I carbon emission norms were first introduced by the Indian government in 2000, followed by BS-II norms in 2002. Therefore, vehicles eligible for the additional rebate must be at least 25 years old. This initiative is part of the Transport Ministry's Voluntary Vehicle Modernization Program or Vehicle Scrapping Policy.
"The government's proposal to double the rebate is a welcome move for the industry. It reflects the Ministry's recognition of the challenges in procuring end-of-life vehicles. This additional incentive is expected to boost volumes for the vehicle recycling sector while reducing acquisition costs for RVSFs. Ultimately, this could lower compliance costs for OEMs under the EPR framework, further strengthening the ecosystem. At Rosmerta Technologies, we are committed to supporting this initiative through our advanced Registered Vehicle Scrapping Facilities (RVSFs) and Automated Testing Stations (ATSs). Such measures will play a key role in accelerating the adoption of sustainable scrapping processes and building a cleaner, greener India." Mr Kartick Nagpal, President of Rosmerta Technologies, commented.
Registered Facilities & Future Plans
Owners looking to scrap their old vehicles can do so through a network of Registered Vehicle Scrapping Facilities (RVSFs) and Automated Testing Stations (ATSs). Currently, there are over 60 RVSFs across 17 states/Union Territories and 75 ATSs in 12 states/UTs in India. The government plans to expand these facilities further across the country.
This policy aims to encourage the removal of older, more polluting vehicles from Indian roads while promoting the purchase of newer, cleaner models. By offering substantial rebates, the government hopes to incentivise vehicle owners to participate actively in this program.
The proposed changes reflect India's commitment to reducing vehicular emissions and improving air quality. As more facilities are established nationwide, it will become easier for vehicle owners to access scrapping services and benefit from the rebates offered.
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