India: As India faces a sharp rise in end-of-life vehicles, digital solutions are emerging to bridge the gap between policy incentives and real consumer benefits. MMCM’s DigiELV platform is enabling vehicle owners to convert scrapped vehicles into measurable financial savings when purchasing new ones, while supporting the country’s vehicle recycling and sustainability goals.

India’s end-of-life vehicle challenge is expanding rapidly. According to NITI Aayog, nearly 10 million vehicles were classified as end-of-life in 2020, and the number is projected to rise to around 23 million by 2025 and nearly 50 million by 2030. Older vehicles not only operate inefficiently but also contribute significantly to pollution. Vehicles manufactured before BS-VI emission norms can emit up to eight times more pollutants compared to modern vehicles.

At the same time, these vehicles contain valuable recyclable materials. Estimates suggest that around 98 million tonnes of steel could be recovered from vehicles manufactured between 2005 and 2023, potentially saving about 43 million metric tonnes of CO₂ equivalent emissions.

NITI Aayog Highlights Structural Challenges

In its analysis of India’s end-of-life vehicle ecosystem, NITI Aayog identified several barriers slowing the transition to a formal scrappage ecosystem. These include:

• Limited rollout of Automated Testing Stations (ATS) and Registered Vehicle Scrapping Facilities (RVSF)

• Weak financial viability of formal scrapping centres

• Procedural delays in deregistration and scrapping

• Low consumer awareness

Another major challenge has been the price advantage offered by informal scrapping channels, where vehicle owners often receive ₹15,000 to ₹20,000 more than through formal routes. This price gap has historically discouraged participation in the regulated scrappage ecosystem.

Government Incentives Encourage Formal Scrapping

To address these barriers, the Government of India introduced incentives under the Vehicle Scrappage Policy led by the Ministry of Road Transport and Highways.

The policy combines national and state-level incentives designed to make scrapping economically attractive. Key benefits include:

• Road tax rebates of up to 25% for personal vehicles and 15% for commercial vehicles, depending on the state

• Scrap value of roughly 4–6% of the new vehicle’s ex-showroom price

• 100% waiver of registration fees for the replacement vehicle

• OEM discounts typically around 1.5% of the ex-showroom price or up to ₹20,000 for passenger vehicles

Some states have introduced additional incentives to accelerate adoption. For example, certain states provide up to 50% road tax concessions for BS-I and pre-2002 vehicles, targeting the most polluting segments of the fleet.

MMCM’s DigiELV Marketplace Bridges the Gap

One of the key implementation challenges identified under the Voluntary Vehicle Fleet Modernisation Programme has been the lack of liquidity and transparency in the trading of Certificates of Deposit (CoD) issued after scrapping a vehicle.

MMCM’s DigiELV platform addresses this challenge through a digital marketplace authorised by the Ministry of Road Transport and Highways and integrated with the VAHAN database.

The platform enables vehicle owners and buyers to trade Certificates of Deposit through a bid-based model, allowing market-driven price discovery. Transactions are digitally verified and transfer certificates are issued instantly.

Policy-linked data shows over 71,000 Certificate of Deposit trades with an average transaction price of ₹10,634 across vehicle categories, demonstrating active participation and growing adoption.

By enabling certificate trading, DigiELV helps reduce the timing gap between scrapping a vehicle and purchasing a new one, allowing owners to realise financial value even if they do not immediately replace their vehicle.

Integration with Sustainability and Compliance Markets

India’s vehicle recycling ecosystem is also becoming increasingly connected to sustainability and compliance frameworks.

Under the Environment Protection Rules 2025, Extended Producer Responsibility (EPR) targets for vehicle recycling are set at:

• 8% from 2025–2030

• 13% from 2030–2035

• 18% from 2035 onwards

Digital marketplaces now allow EPR certificate trading, enabling manufacturers to track obligations and buy or sell credits accordingly.

In addition, SDG-linked credits can be retired to meet voluntary sustainability targets and disclosure requirements, linking vehicle recycling to broader environmental reporting frameworks.

Measurable Environmental and Economic Outcomes

Formal scrappage is already generating measurable results.

According to data associated with DigiELV’s ecosystem:

• 80,815 tonnes of CO₂ emissions reduced

• ₹292.26 crore saved by vehicle buyers

• 117,656 new vehicle purchasers benefited

These outcomes demonstrate how digital platforms, policy incentives, and market mechanisms can work together to support both economic and environmental objectives.

A Growing National Transition

India’s vehicle scrappage policy represents a broader shift in how mobility, environmental responsibility, and economic value intersect.

With policy guidance from NITI Aayog, incentive frameworks from the Ministry of Road Transport and Highways, and digital execution through platforms such as DigiELV, the country’s scrappage ecosystem is gradually moving toward a more formal, transparent, and market-driven model.

Rising Certificate of Deposit trading volumes, increasing participation in formal scrapping channels, and measurable reductions in emissions indicate that the transition is underway.

India’s vehicle scrappage system is no longer only a regulatory requirement. It is increasingly evolving into an operational marketplace that connects environmental impact with economic value for citizens and industry alike.