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Green Transition, Climate & Environment
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Enhancing
Circular Economy
of End-of-Life Vehicles
(ELVs) in India
Enhancing Circular Economy of End-of-Life Vehicles (ELVs) in India
Copyright @ NITI Aayog
Published: January 2026
NITI AAYOG
National Institute for Transforming India
Government of India
NITI Bhawan, Sansad Marg
New Delhi – 110001
DISCLAIMER
The Energy and Resources Institute (TERI) has received the financial assistance under the
Research Scheme of NITI Aayog (RSNA) to prepare this report. While due care has been
exercised to prepare the report using the data from various sources, NITI Aayog does not
confirm the authenticity of data and accuracy of the methodology to prepare the report
work. NITI Aayog shall not be held responsible for findings or opinions expressed in the
document. This responsibility completely rests with the Institute/Individual Expert, Dr.
Souvik Bhattacharya, Director and Senior Fellow, TERI.
Enhancing
Circular Economy
of End-of-Life Vehicles
(ELVs) in India
Foreword
Foreword
Foreword
Acknowledgements
We thank Shri BVR Subrahmanyam, CEO, NITI Aayog, for his guidance and valuable
suggestions in the preparation of this report. We also thank the members of the Working
Group on Circular Economy of End-of-life Vehicles (ELVs) for their active participation and
constructive inputs. We thank our knowledge partner, The Energy and Resources Institute
(TERI), along with the concerned ministries and all stakeholders for their support in finalising
the report.
Chairperson
Maj Gen K Narayanan, AVSM**, SM
(Retd), Programme Director, Security
and Law, NITI Aayog
Chairperson, Working Group on Circular
Economy of End-of-Life Vehicles (ELVs)
Leadership
Shri Suman K. Bery
Vice Chairperson, NITI Aayog
Shri Rajiv Gauba
Member, NITI Aayog
Shri B.V.R Subhramanyam
CEO, NITI Aayog
Dr. Anshu Bharadwaj
Programme Director, Green Transition,
Climate and Environment (GTC&E)
Division, NITI Aayog
Shri Surender Mehra
Advisor, GTC&E, NITI Aayog
Shri Amit Verma
Former Director, GTC&E, NITI Aayog
(Presently Joint Secretary, Department
of Commerce)
Shri Satyendra Kumar
Former Director, GTC&E, NITI Aayog
Shri Priyavrat Bhati
Programme Lead, GTC&E, NITI Aayog
Authors
NITI Aayog
Shri Amit Verma
Former Director, GTC&E, NITI Aayog
Ms. Prinshila Gandhi
Young Professional, GTC&E, NITI Aayog
Dr. Abhijeet Anand
Consultant, GTC&E, NITI Aayog
Knowledge Partners
Dr Souvik Bhattacharya
Director and Senior Fellow, TERI
Mr. Arya Jash
Research Associate, TERI
Working Group Coordinators
Shri Amit Verma
Former Director, GTC&E, NITI Aayog
Ms. Prinshila Gandhi
Young Professional, GTC&E, NITI Aayog
Working Group Members
Sh. Sudhendu Jyoti Sinha,
Former Adviser (Infra & Connectivity),
NITI Aayog
Shri KC Sharma
Advisor, MoRTH
Shri Ankit Duggar
Director, MoRTH
Shri Harsh Prabhakar
Executive Engineer (Transport), MoRTH
Shri Paresh Kumar Goel
Former Director, MoRTH
Smt. Neha Verma
Former Director, MoSteel
Shri Santosh Kumar
Assistant Director, MoMSME
Shri Ashok Kumar
Deputy Director General, BEE
Shri Saurabh Diddi
Director, BEE
Shri Amrendra Kishore Singh
Deputy Secretary, DHI
Dr. Rashid Hasan
Senior Advisor, SIAM
Mr. Prashant K. Banerjee
Executive Director, SIAM
Mr Prabhakar Tiwari
Co-Chair, Recycling & Material Group.
Mr. Mrityunjay Kumar
Director, RCEICE, FICCI
Dr Praveen Kumar
Programme Head, WRI
Mr. Alok Verma,
Head Corporate Strategy & Head ESG,
Ashok Leyland
Mr. Amitava Roy
Executive Advisor, Maruti Suzuki Toyota
India
Mr. Vinnie Mehta
Director General, Automotive Component
Manufacturers Association of India
(ACMA)
Ms. Seema Babal
Director, Public Policy Regulations,
(ACMA)
Ms. Shikha Tripathi
Deputy Director, ACMA
Mr. Vishal Handa
DGM, Maruti Suzuki India Ltd.
Mr. Pankaj Khera
DGM, Maruti Suzuki India Ltd.
Mr. Rahul Chaudhary
Government Affairs, Maruti Suzuki India
Limited
Mr. Ranjit Singh
EVP, Maruti Suzuki India Ltd.
Mr. Aakaash Singh
DGM, Tata Motors
Mr. Danish Ghazali,
Senior Manager, Tata Motors
Mr. Syed Mohammad Danish,
GM & Head Central Mining, Tata Motors
Mr. Mohammad Danish Ghazali
Deputy GM, Tata Motors
Ms. Lovey Tripathi,
Senior Manager, Tata Motors
Mr. Ashish Bhagra
Chief Operating Officer, Mahindra CERO
Mr. Praveen Bansal
Company Secretary, Maruti Suzuki
Toyotsu India Pvt. Ltd. (MSTI)
Mr. Praveen Gupta
Chief Operations, Mahindra MSTC
Recycling Ltd.
Mr. Gaurav Kaul
H/o Government Relations, MRAI
Mr. Vineel Rajgopal, Valeo
Mr. Sauran Kumar
Lead EV Vehicles, Volvo Eicher
Commercial Vehicles
Mr. Navaneeth Raghu
Lead Sustainability, Mercedes-Benz R&D
Sant Sharan Singh
Group Public Affair, Mahindra
Mr. Kiran Sarkar,
Head Sustainability & Environment,
Mahindra
Mr. Rahul Govindwar
Head Analytics & Business Development,
Mahindra Accelo
Dr Abhinav
Head of Strategy, Attero
Ms. Paromita Chatterjee
Public Policy and Government Affairs,
Attero
Ms. Himanshi Bahl
Policy Specialist, Attero
Mr. Nitin Chitkara
CEO, Meta Materials Circular Market
(MMCM)
Mr. Yashodhan Rametke
Former Vice President, MMCM
Mr. Kartick Nagpal
President, Rosemarta, MRAI
Mr. Jagdish Prasad
Executive Member, MRAI
Mr. Pramod Shinde
Head, Communication, MRAI
Mr. Chandresh, Bosch
Mr. Karthik Sarma, Cummins
Dr. Shrutika, Subros
Mr. Yash Arora
Pineview Technology Private Limited,
RVSF
Mr. Brijesh Singh
Rosmerta Recycling, RVSF
Mr. Lawrence Pinto
Orissa Steelmetaliks Pvt Ltd, RVSF
Mr. Surjeet Singh Verma
Mahindra MSTC Recycling Pvt Ltd, RVSF
Mr. Mariah Shankar
Suhas Automotive Private Limited, RVSF
Mr. Praveen Sadhuram Goyal
Bhagyalaxmi Rolling Mill Pvt Ltd, RVSF
Mr. Virendra Deep Singh
Global Ultra Tech, RVSF
Mr. Anand Deshpande
Mahindra MSTC Recycling Pvt Ltd, RVSF
Mr. Nitesh Modi
Shree Ambica Automotive Pvt Ltd, RVSF
Mr. Shrenik Viren Diwanji
Shuchaye Recyclers Private Limited,
RVSF
Mr. Virender Dahiya
Serve Uttam Ventures Private Limited,
RVSF
Mr. Ashish Dhingra
CMR Kataria Recycling Pvt. Ltd, Gujrat
RVSF
Collaborators
Sh. V Umashankar
Secretary, MoRTH
Shri Tanmay Kumar
Secretary, MoEFCC
Shri Neelesh Kumar Sah
Joint Secretary, MoEF&CC
Research & Networking (R&N) Team
Ms. Anna Roy
Programme Director, R&N, NITI Aayog
Ms. Banusri Velpandian
Senior Specialist, R&N, NITI Aayog
Design Team
Ms. Keerti Tiwari,
Director, Communication, NITI Aayog
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 11
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA List of Figures.................................................................................................................................ii
List of Abbreviations....................................................................................................................iii
Executive Summary......................................................................................................................iv
1. Introduction..............................................................................................................................01
2. End-of-Life Vehicle Management in India........................................................................05
2.1 Definition of ELV in India
................................................................................................05
2.2 Risks and Challenges of Inf
ormal Recycling
............................................................. 05
2.3 Consumer Journey of Vehicle Scrapping in India....................................................07
2.3.
1 Awareness
................................................................................................................07
2.3.2 R
esearch
..................................................................................................................07
2.3.3 E
valuation
...............................................................................................................08
2.3.4 Decision..................................................................................................................08
3. R
egulatory Landscape for End-of-Life Vehicles
............................................................09
3.1 Rules notified b
y MoRTH for ELV Management
.......................................................09
3.2 Norms f
or Fitness Testing of Transport and Non-Transport Vehicles
..................13
3.3 Guidelines on Pr
ovisions for End of Life Vehicles, June 2021 (AIS-129)
.............13
3.4 Guidelines for Environmentally Sound Facilities for Handling and
Scrapping of End-of- Life Vehicles by CPCB..............................................................13
3.5 Environment Protection (End-of-Life Vehicles) Rules, 2025,
Ministry of Environment, Forest and Climate Change (MoEFCC)..........................14
3.6 Scheme for Special Assistance to States for Capital Investment
(SASCI), Ministry of Finance...........................................................................................14
4. Required ATS’s for ELV Management................................................................................20
4.1 Ov
erview of Current Automated Testing Stations (ATS) Infrastructure
.............20
4.2 Geogr
aphical Distribution and Growth of ATS
.........................................................20
4.3 A
TS Infrastructure Requirement Analysis
..................................................................22
4.4 Unders
tanding various models towards establishment of ATS
...........................23
4.4.
1 Privately owned and operated enterprise
........................................................23
4.4.2 Setup b
y State, operations outsourced to a private vendor
......................23
4.4.3 Priv
ately set up, the state selects concessionaire through bidding
.........23
4.4.4 Set up and oper
ated through a Public-Private-Partnership model
..........23
4.5 K
ey Challenges and Proposed Solutions
...................................................................24
4.5.
1 Limited Adoption of Infrastructure Across the Country
...............................24
Table of Contents
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA i
4.5.2 Regional Imbalance in Existing Infrastructure...............................................24
4.5.3 Illegal Issuanc
e of Fitness Certificates
.............................................................24
5. Infr
astructure Requirements and Other Aspects of RVSFs
..........................................26
5.
1 Overview of Current Registered Vehicle Scrapping Facilities (RVSF)
Infrastructure
.....................................................................................................................26
5.2 Geogr
aphical Distribution and Infrastructure Growth of RVSFs
..........................26
5.2.
1 Geographical Distribution and Setup
................................................................26
5.2.2 R
VSF Infrastructure Requirement
......................................................................28
5.3 Ov
erview of Informal Vehicle Scrapping in India
....................................................29
5.4 Pric
e Differential and Different Approaches to Bridge the Gap
..........................30
5.4.
1 Price Differential - RVSF Perspective
.................................................................31
5.4.
1.1 Sale of spare parts by RVSF
.........................................................................32
5.4.
1.2 Sale of EPR Certificates
................................................................................33
5.4.2 Benefits A
ccrued to Consumers
........................................................................34
5.4.2.
1 Certificate of Deposit (CoD)
........................................................................35
5.4.2.2 Sho
wroom Discount from Automobile OEMs........................................36
5.5 Key Challenges and Proposed Solutions
...................................................................36
5.5.
1 Limited Adoption of Infrastructure Across the Country
...............................36
5.5.2 R
egional Imbalance in Existing Infrastructure
................................................37
5.5.3 R
egistration and compliance process for RVSF
.............................................37
5.5.4 Limit
ed ELV Feedstock Reaching RVSFs
.........................................................37
5.5.5 Int
ense Competition from Informal Sector Operators
.................................37
6. Simplifying V
ehicle-Owner Related Procedural Issues
................................................40
6.1 De-r
egistration process of ELV from VAHAN database
.........................................40
6.2 Enhancing the V
AHAN portal
......................................................................................40
7
. Strengthening Consumer Awareness on Recycling Ecosystem
..................................44
7.
1 Lack of Consumer Awareness
.......................................................................................44
7
.2 Communication strategy
...............................................................................................44
8. Other Int
erventions
................................................................................................................46
8.
1 Carbon Credits
..................................................................................................................46
8.2 V
ehicle Insurance as a Lever
.........................................................................................46
8.3 GS
T
......................................................................................................................................46
9. Conclusion - Summary of Recommendations.................................................................48
10. Anne
xure
................................................................................................................................. 53
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA ii
List of Figures
Figure No.Description Page
1 Projected ELV stock in India 01
2 Steel recovery from vehicles 03
3 Informal disposal of an ELV 06
4 Consumer Journey of ELV Disposal 07
5 Certificate of Deposit issued by RVSF 12
6 Infrastructure in an ATS 20
7 Geographical Distribution of ATS as on 01.09.25 21
8 ATS setup in each FY 21
9 ATS Infrastructure Gap 22
10 State-wise ATS Revenue 24
11 Infrastructure in an RVSF setup 26
12 Geographical Distribution of RVSFs as on 01.09.25 27
13 RVSF set up in each FY 27
14 Break-even point for an RVSF 28
15 Current Route for Vehicle Scrapping 30
16 RVSF-Informal Scrapper Price Differential 31
17 Benefits Accrued to Consumer 34
18
Unfit Vehicle Dashboard (Visible to RVSF owners and
State Administration on V-Scrap Portal)
41
19 Aadhar-based Vehicle Ownership Transfer 43
20
Number of Vehicles to be Tested and Total ATS Testing
Capacity
53
21
Total RVSF Scrapping Capacity and Steel Recovery
from EPR Targets
58
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA iii
List of Abbreviations
Abbreviation Description
ACMA Automotive Component Manufacturers Association of India
ATS Automated Testing Station
BEE Bureau of Energy Efficiency
BS Bharat Stage
CoD Certificate of Deposit
CVS Certificate of Vehicle Scrapping
CPCB Central Pollution Control Board
ELV End-of-Life Vehicle
EPR Extended Producer Responsibility
IRDAI Insurance Regulatory and Development Authority of India
MoEFCC Ministry of Environment, Forests and Climate Change
MoF Ministry of Finance
MHI Ministry of Heavy Industries
MoMSME Ministry of Micro, Small and Medium Enterprises
MoRTH Ministry of Road Transport and Highways
OEM Original Equipment Manufacturers
RVSF Registered Vehicle Scrapping Facility
SIAM Society of Indian Automobile Manufacturers
SPCB State Pollution Control Board
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA iv
Executive Summary
India’s transition towards sustainable development requires a strategic focus on resource
efficiency, environmental protection, and circular-economy practices across key sectors. One
of the critical areas within this broader agenda is the responsible management of material-
intensive products at the end of their lifecycle. As the country continues to witness rapid
urbanisation and an expanding vehicular population, the need for structured interventions in
the transportation and mobility sector becomes increasingly evident.
In this context, the management of End-of-Life Vehicles (ELVs) has emerged as a policy
priority, requiring coordinated action to address environmental, economic, and logistical
challenges. The growing volume of ELVs on Indian roads calls for the creation of a formalised,
sustainable, and economically viable scrapping ecosystem. In recent years, several regulatory
measures have been introduced at the central level, including the enforcement of fitness
testing mandates, standardised scrapping protocols, and Extended Producer Responsibility
(EPR) obligations, to promote responsible vehicle disposal.
Through extensive consultations with stakeholders and in-depth analysis of operational
realities, four core challenges have been identified that hinder the development of a well-
functioning ELV circular economy. These include the limited rollout of Automated Testing
Stations (ATS) and Registered Vehicle Scrapping Facilities (RVSFs) infrastructure across
states; weak financial viability of RVSFs; procedural bottlenecks in scrapping and de-
registration processes; and insufficient consumer awareness.
In response, a range of policy recommendations have been proposed. India’s vehicle
scrappage ecosystem to be strengthened through a coordinated approach that focuses on
rapid infrastructure rollout, sector formalization, procedural simplification, and enhanced
circular-economy outcomes. ATS and RVSFs to be established on a time-bound basis.
PSU-led models with private operations may be explored to ensure broader geographic
coverage. Formalization of the informal scrappage sector to be undertaken in a phased
manner, supported through platforms such as Udyam Assist and technical assistance under
SASCI. A one-time waiver of legacy environmental liabilities may be considered to encourage
compliance by small dismantlers. To enhance financial viability and material recovery, the
spare parts trade linked to ELVs should be formalized, EPR norms strengthened through
higher mandated recovery rates, and uniform Certificate of Deposit (CoD) concessions
adopted across States and UTs. Transparency in value realization to be improved by
upgrading the V-Scrap portal with a robust scrap price discovery mechanism.
Procedural reforms to ensure that vehicle de-registration occurs only upon submission
of a valid CoD, supported by Aadhaar-based ownership transfer and automated penalty
accrual. These reforms to be complemented by a continued public awareness, including
targeted outreach campaigns, VAHAN-based alerts to vehicle owners nearing ELV status,
and clear dissemination of authorized ATS and RVSF information on government portals.
Collectively, these measures will improve compliance, environmental outcomes, and ease
of participation for stakeholders, ensuring effective implementation of the National Vehicle
Scrappage Policy.
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 1
1. Introduction
India’s ongoing industrial development and rapid pace of urbanization have given rise
to growing concerns around sustainable waste management and responsible resource
utilization. As one of the fastest-growing economies, India is currently positioned as
the third-largest automobile market in the world
1
, witnessing the addition of over 20
million vehicles to its road network every year. This increasing vehicle population
directly contributes to the growing volume of End-of-Life Vehicles (ELVs) across the
country. As per estimates
2
, India had approximately 10 million ELVs in circulation in
2020. The cumulative number of ELVs is expected to increase to nearly 23 million by
the end of 2025 and is projected to reach close to 50 million by 2030, underscoring
the urgent need for a robust policy and regulatory framework for the sustainable
management of ELVs (Figure 1).
Number of cumulative ELVs in India (in million)
Figure 1: Projected ELV stock in India
The growing volume of ELVs poses multidimensional challenges regarding road safety and serious environmental concerns while both using and scrapping them. The old and unfit vehicles raise road safety issues, as they become increasingly difficult to operate and control and therefore must be declared end of life based on robust testing. Emissions from older vehicles are significantly more polluting, up to eight times more in the case of BS-I vehicle as compared to BS-VI emission standard vehicle and therefore there is a strong case to replace them with less polluting BS-VI or electric vehicles (EV) (Box 1.1)
3
.
1
SIAM (2024) Annual Report 2023-24 https://www.siam.in/uploads/filemanager/SIAMAnnualReport2023-24.pdf
2
SIAM (2023) Context Paper: ELV Recycling - Status of Circular Economy in India https://www.siam.in/
uploads/filemanager/377ChakriytaContextPaper.pdf
3
Sources – 1) CPCB (2017) Vehicular Exhaust, https://cpcb.nic.in/vehicular-exhaust/
2) Spinny (2025) Bharat Stage Emission Norms: BS-I, BS-II, BS-III, BS-IV, BS-VI Explained https://www.
spinny.com/blog/bharat-stage-emission-norms-bs-i-bs-ii-bs-iii-bs-iv-bs-vi-explained/
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 2
Box 1.1 – Bharat Stage Emission Standards (BSES)
India’s Bharat Stage emission standards are a set of progressively stringent
vehicular emission regulations implemented by the Ministry of Road Transport and
Highways (MoRTH) and enforced by the Central Pollution Control Board (CPCB).
These standards regulate the permissible limits of air pollutants such as nitrogen
oxides (NO
x
), carbon monoxide (CO), hydrocarbons (HC), and particulate matter
(PM) emitted by internal combustion engine vehicles.
Table 1: Comparison of various BS norms
Source: CPCB, Spinny
The transition from BS-IV to BS-VI norms (skipping BS-V), implemented nationwide from April 1, 2020, represented a critical leap in India’s commitment to reducing vehicular emissions. BS-VI standards introduced advanced after-treatment technologies such as diesel particulate filters (DPF), selective catalytic reduction (SCR), and onboard diagnostic systems, along with a significant reduction in sulphur content in fuels.
Importantly, while pre-BS VI vehicles may appear to be visually well-maintained
and emit little visible smoke, empirical evidence indicates that their actual
pollutant load per kilometre is substantially higher compared to BS-VI compliant
vehicles.
However, the environmental challenges of scrapping an ELV are also significant
due to lack of formal vehicle scrapping facilities which have all the environmental
safeguards.
The economic potential of ELV processing is also important as ELVs hold
considerable value as a resource. It is estimated that around 98 million tonnes of
steel is likely to be recovered from vehicles manufactured between 2005 and 2023,
which may serve as a major source of secondary steel for the country (Figure 2),
saving 43 million metric tonnes of CO2 equivalent.
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 3
Figure 2: Steel recovery from vehicles
Ministry of Road Transport and Highways (MoRTH) has led the initiatives in this
regard by starting the Voluntary Vehicle-Fleet Modernisation Program in 2021. The
ministry has worked to create a scientific basis to test the fitness of the vehicles
through Automated Testing Stations (ATS) rather than just the years of usage. Once
a vehicle reaches end of life, MoRTH has also enabled creation of Registered Vehicle
Scrapping Facilities (RVSF) to dispose the ELV in an environmentally sound manner
while also recovering the maximum possible economic value from it.
Despite the efforts in the right direction, the current ELV scrapping landscape
in India continues to face several challenges in developing a well-functioning
scrapping ecosystem. Key issues include limited availability of ATS, non-existent
and underutilized RVSFs, complex procedural requirements for deregistration and
low public awareness.
These challenges are further aggravated by the widespread presence of an
unregulated informal scrapping sector, which operates at lower costs and offers
attractive bids to vehicle owners seeking to dispose their ELV.
This report outlines the major bottlenecks in the existing scrapping system and
provides actionable recommendations aimed at strengthening the ELV value chain,
promoting environmentally sound practices, and advancing the circular economy
framework for vehicles in the country.
Million Tonnes of Steel
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 5
2. End-of Life Vehicle Management in India
2.1 Definition of ELV in India
End-of-Life Vehicles refer to vehicles that are no longer deemed roadworthy or
legally eligible for use under applicable regulatory provisions. As per the Motor
Vehicles (Registration and Functions of Vehicle Scrapping Facility) Rules, 2021, such
vehicles include:
2.1.1
Those that are no longer validly registered;
2.1.2 Have been declared unfit by an authorised Automated Fitness Centre or Road
Transport Officer;
2.1.3 Have had their registration cancelled either under Chapter IV (“Registration of
Motor Vehicles”) of the Motor Vehicles Act, 1988 or through an order issued by
a competent Court of Law;
2.1.4
Additionally, vehicles that are voluntarily declared as waste by their legitimate registered owner, owing to reasons specified in the rules.
Further, according to orders dated 26.11.2014 and 07.04.2015 passed by the Honourable National Green Tribunal and upheld by an order of the Honourable Supreme Court of India dated 29.10.2018, petrol vehicles over 15 years old and diesel vehicles over
10 years old are not allowed to ply on the roads of the National Capital
Region of Delhi. These judicial orders are enforced by the Government of the National Capital Territory of Delhi (GNCTD) and Commission for Air Quality Management (CAQM). As on August 2025, the above orders are under judicial review by the Honourable Supreme Court itself after the Government of Delhi approached the court for a fitness-based criteria rather than an age-based criteria to declare an ELV.
2.2 Risks and Challenges of Informal Recycling
When a vehicle reaches the end of its useful life from the consumer’s perspective, it becomes essential to ensure its responsible disposal in an environmentally sound manner. Informal scrapping may have adverse environmental effects as described in Box 2.1.1. Further the benefits of the formal environmentally sound vehicle scrapping are provided in Box 2.1.2.
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 6
Box 2.1.1 – Environmental and Safety
Risks of Informal ELV Scrapping
• Release of hazardous fluids such as
fuel, coolant, and brake oil into soil
and water systems.
• Uncontrolled disposal of
batteries, resulting in heavy metal contamination.
•
Improper dismantling of airbags and refrigerants, leading
to emission of
toxic gases like CFCs.
• Fire and explosion risks due to crude processing or storage of fuel residues.
•
Unsafe working conditions for laborers; exposure to toxic substances.
•
Illegal dumping of automobile shredder residue (ASR), including plastics, foams,
and glass, into
landfills.
Box 2.1.2 - Benefits of Formal,
Environmentally Sound Vehicle
Scrapping
•
Proper handling and safe disposal of
all hazardous components and fluids.
• High recovery rates of valuable materials—steel, non-ferrous metals, plastics—through scientific recycling.
•
Reduction of soil, air, and water pollution through compliance with environmental regulations.
•
Traceability and documentation through Certificates
of Deposit
(CoD), supporting legal compliance and incentives.
•
Creation of formal sector employment and improved workplace safety.
•
Contribution to national resource efficiency and
circular economy
targets.
The process flow of scrapping an ELV is illustrated in Figure 3. It involves multiple steps with specific challenges under the existing regulatory and operational ecosystem.
Figure 3: Informal disposal of an ELV
(Source: SIAM (2023) Context Paper: ELV Recycling - Status of Circular Economy in India)
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 7
2.3 Consumer Journey of Vehicle Scrapping in India
The consumer journey related to vehicle scrapping typically progresses through
several key stages, including awareness, information seeking, evaluation of options,
and ultimately, decision-making. Each stage plays a critical role in shaping the
consumer’s approach to the sustainable disposal of end-of-life vehicles. This is
summarised in Figure 4.
Figure 4: Consumer Journey of ELV Disposal
2.3.1 Awareness
The first step in the vehicle scrapping process is awareness about the scrapping
ecosystem. At this stage, consumers need to be informed about available options
for lawful disposal of their ELVs. In most cases, consumers either rely on internet
searches or consult friends and family who have previously scrapped a vehicle, or
local car repair shops. However, visibility of formal scrapping facilities, particularly
Registered Vehicle Scrapping Facilities (RVSFs), is limited online. As a result, reliable
information regarding formal options is not easily accessible to the consumer.
2.3.2 Research
To search for ELV disposal options, a user may browse vehicle resale platforms
such as True Value, Spinny, Cars24, CarDekho, OLX etc., or visit the websites of
authorised RVSFs like Tata ReWire, Mahindra CERO, Maruti Suzuki Toyotsu India
Pvt Ltd, etc. Alternatively, some consumers may approach local informal vehicle
scrappers. The research stage is often marked by the presence of misinformation
about price and lack of clarity of process, which tends to divert consumers towards
unregulated and informal channels.
Informal: No Certificate of Deposit/ Certificate of
Vehicle Scrapping
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 8
2.3.3 Evaluation
In this phase, consumers assess the trade-offs between formal and informal scrapping
options. The decision is often influenced by financial and operational considerations.
For instance, informal scrappers tend to offer a higher price—ranging between
₹15,000 to ₹20,000 more for a mid-range vehicle such as the Suzuki Swift Dzire—
compared to formal entities. Additionally, the service lead time at RVSFs may be
longer by 4-14 days, further discouraging consumers. However, unlike authorized
scrapping facilities, informal scrappers do not issue vital documents like the
Certificate of Deposit (CoD), effectively excluding vehicle owners from government
incentives and hindering de-registration.
2.3.4 Decision
Based on the insights gained from the earlier stages, consumers make a final choice
between formal RVSFs and informal scrapping dealers. This decision is often driven
by price considerations and convenience of service.
This consumer journey highlights the need for targeted awareness initiatives to
educate citizens about the environmental, legal, and long-term benefits of formal
scrapping. Despite the structured and compliant process offered by RVSFs,
consumers often opt for informal channels due to better immediate financial returns,
and faster and hassle-free service. Addressing these behavioural and informational
gaps is essential to enhance the uptake of formal vehicle scrapping systems.
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 9
3. Regulatory Landscape for End-of-Life Vehicles
3.1 Rules notified by MoRTH for ELV Management
The regulatory framework governing ELVs in India is primarily shaped by a set of key
rules and notifications issued by Ministry of Road Transport and Highways (MoRTH)
and Ministry of Environment, Forests and Climate Change (MoEFCC). These rules
define the procedures, standards, and responsibilities across the ELV ecosystem —
from vehicle fitness testing and scrapping operations to environmental compliance
and producer responsibility.
A summary of rules notified by the MoRTH, the nodal ministry for vehicle scrapping,
since announcing the Voluntary Vehicle Modernisation Program (V-VMP) are listed
below.
Table 2: List of various rules notified by MoRTH on vehicle scrapping
Title
Gazette
Notification
Brief Description
Motor Vehicles (Registration and Functions of Vehicle Scrapping Facility) Rules,
2021
Motor Vehicles
(Registration
and Functions of
Vehicle Scrapping
Facility) Rules,
2021
GSR 653(E);
23 Sep 2021
• Defines RVSF and outlines powers, duties,
and eligibility conditions.
• Specifies procedure for registration, validity,
and renewal for RVSF.
• Covers scrapping procedure, issuance of
CoD & CVS, and requirements for scrapping
yard and collection centre.
• Mandates audits, certifications, and
digital record maintenance, and provides
mechanism for appeal.
Amendment
Rules, 2022
GSR 695(E); 13
Sep 2022 • RVSF registration validity increased to
15 years, with renewals every 10 years
thereafter.
• CoD now valid for 2 years to claim incentives
on new vehicle purchases.
• Land lease allowed in place of ownership;
new self-declaration requirements for safety
and environmental compliance.
• Application processing capped at 60 days;
revised CoD format introduced.
Amendment
Rules, 2024
GSR 212(E);
15 Mar 2024 • The entity shall obtain Consent to Establish
from the SPCB for setting up RVSF.
• CoD shall be electronically tradeable with
no incentives for government or impounded
vehicles.
• Authorisation validity is extended from two
to three years.
• RVSF shall ensure audits for compliance and
mass flow tracking.
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 10
Title
Gazette
Notification
Brief Description
(Twenty First
Amendment)
Rules, 2021
[Chapter XI –
Recognition,
Regulation
and Control
of Automated
Testing Stations]
GSR 652(E);
23 Sep 2021 • Lays down the guidelines for recognition
and regulation of Automated Testing
Stations (ATS).
• Specify use of automated equipment for
conducting fitness tests of vehicles.
• Specify issuance of Certificates of Fitness.
• Eligibility and infrastructure required to set
up ATS.
(Twenty Third
Amendment)
Rules, 2021
GSR 714 (E);
04 Oct 2021 • Provides for waiver of fee for issue of
certificate of registration submission of
CoD.
• Revision of fee for renewal of registration,
fitness test and certificate
.
(Twenty Fourth
Amendment)
Rules, 2021
GSR 720(E);
05 Oct 2021
• Provides for concession in the motor vehicle
tax:
x
upto 25%, in case of non-transport vehicles.
xupto 15%, in case of transport vehicles.
• for a vehicle registered against submission
of CoD.
(Eighth
Amendment)
Rules, 2022
GSR 272(E);
05 Apr 2022 • Provides for mandatory fitness of motor
vehicles only through ATS as under –
xFor Heavy Goods Vehicles/Heavy
Passenger Motor Vehicles with effect from
01 Apr 2023 onwards.
xFor Medium Goods Vehicles/Medium
Passenger Motor Vehicles and Light Motor
Vehicles (Transport) with effect from 01
Jun 2024 onwards.
(Seventeenth
Amendment)
Rules, 2022
GSR 797(E); 31
Oct 2022 • Provides for a single-window electronic
portal for ATS registration applications,
uploads, and payments.
• Establishes 10-year validity and renewal
period for registration certificates.
• Mandates six-monthly inspection and
calibration of ATS with reporting on the
government portal.
• Vehicle failing mandatory parameters shall
be declared Unfit, with provision for re-test
within 30 days.
• If the vehicle fails critical tests again or is
not re-tested within the prescribed period,
it shall be declared as ELV.
(First
Amendment)
Rules, 2023
GSR 29(E);
16 Jan 2023 • Provides that Registration Certificate for
government-owned vehicles shall not be
renewed after the lapse of fifteen years.
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 11
Title
Gazette
Notification
Brief Description
(Fifth
Amendment)
Rules, 2023
GSR 663(E); 12
Sep 2023 • Prescribes fitness validity as two years for
transport vehicles up to eight years old, and
one year for vehicles older than eight years.
• Mandates that fitness of heavy, medium,
and light motor vehicles shall be conducted
exclusively through ATS effective from 01
Oct 2024.
• Where ATSs are operational within a
registering authority’s jurisdiction, fitness
of all transport vehicles shall be carried out
only through them.
(Seventh
Amendment)
Rules, 2024
GSR 195(E); 14
Mar 2024 • A vehicle which fails to undergo fitness test
within 180 days from the due date or expiry
of certificate of fitness shall be declared as
ELV.
• The declaration shall be recorded in
the VAHAN database by the respective
registering authority.
• The declaration shall not be applicable to
specialized and exempted vehicle categories
as notified by the Central Government.
(First
Amendment)
Rules, 2025
GSR 200(E);
26 Mar 2025 • 50% concession on MV tax, against CoD for:
xAll transport and non-transport vehicles
which are manufactured as per BS-I norms
and earlier Mass Emission Standard norms.
xAll medium and heavy goods and
passenger motor vehicles which are
manufactured as per BS-II norms.
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 12
Box 3.1 Certificate of Deposit
Figure 5: Certificate of Deposit issued by RVSF
(Source: VAHAN V-Scrap Portal User Manual)
The Certificate of Deposit (CoD) is the certificate issued by the RVSF to recognise
the transfer of ownership of the vehicle from the registered owner to the Registered
Scrapper for further treatment as per the Motor Vehicles (Registration and Functions
of Vehicle Scrapping Facility) Rules, 2021 issued by MoRTH. The CoD is a necessary
and sufficient document for the owner to avail incentives and benefits for purchase
of a new vehicle.
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 13
MoRTH has also launched a Government e-Marketplace (GeM) e-auction portal
recently for auction of Govt. vehicles for scrapping at RVSFs where so far 35,000
vehicles (as per MoRTH data from 01.04.2025 to 30.09.2025) have been auctioned
for scrapping by Central Government departments and ministries.
3.2 Norms for Fitness Testing of Transport and Non-Transport Vehicles
The government provisions related to fitness testing, as prescribed under the
guidelines issued by MoRTH, for various categories of vehicles are outlined in Table
3 below. MoRTH has notified 01 Apr 2025 to be the cut-off date for mandatory
testing of transport vehicles at ATSs.
Table 3: Norms for Fitness Testing of Transport and Non-Transport Vehicles
(Source: MoRTH)
Vehicle Category Testing Frequency
Transport vehicles Undergo fitness test every 2 years for first 8 years
and annually thereafter
Non-Transport vehicles Valid fitness certificate is necessary for renewal of
registration after 15 years. Renewal is valid for every
5 years
Furthermore, under the Central Motor Vehicles (Fifth Amendment) Rules, 2023, it
is mandatory for transport vehicles to undergo fitness testing exclusively through
Automated Testing Stations (ATS) where such facilities are available within the
jurisdiction of the registering authority. Consequently, mandatory access to Regional
Transport Offices (RTOs) for fitness testing has been revoked in districts where
ATSs are operational—covering 101 RTOs across 87 districts in 14 States and Union
Territories.
3.3 Guidelines on Provisions for End of Life Vehicles, June 2021 (AIS-129)
These standards, developed by the Automotive Industry Standards Committee
under MoRTH, provides the regulatory and procedural framework for establishing
and operating Registered Vehicle Scrapping Facilities (RVSFs). It applies to all
vehicle categories and clearly defines the roles of owners, scrappers, and authorities.
The standard outlines eligibility criteria, registration and documentation
requirements, and mandates environmentally sound practices for scrapping ELVs.
It details the full scrapping process—from depollution and dismantling to disposal—
while prescribing technical and environmental infrastructure, including hazardous
waste management, drainage, and de-risking equipment. AIS-129 prohibits reuse
of critical safety and emission components, ensures compliance through CPCB
guidelines, and mandates third-party audits and reporting for safe, transparent, and
accountable ELV processing.
3.4
Guidelines for Environmentally Sound Facilities for Handling and
Scrapping of End-of- Life Vehicles by CPCB
To support India’s transition to a circular economy and ensure sustainable ELV management, the CPCB issued revised guidelines in March 2023 (earlier guidelines having been published in 2016 and 2019) for the environmentally sound handling,
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 14
dismantling, depollution, and recycling of ELVs. These guidelines align with the
Motor Vehicles (Registration and Functions of Vehicle Scrapping Facility) Rules,
2021, and harmonise with the Steel Scrap Recycling Policy and AIS-129 standards.
The document outlines detailed procedural, environmental, and infrastructural
requirements for setting up and operating RVSFs, with emphasis on regulatory
compliance, safe handling of hazardous materials, and traceable processing of scrap
through formal channels.
The guidelines adopt a step-by-step approach, covering ELV collection, depollution,
dismantling, shredding, waste segregation, and final disposal. It highlights the
importance of controlling pollution from hazardous substances such as oils,
coolants, batteries, airbags, refrigerants, and ASR (Automobile Shredder Residue),
and mandates their management under various Waste Management Rules under
the Environment (Protection) Act, 1986. Furthermore, the guidelines call for robust
environmental, health, and safety (EHS) protocols, infrastructure standards for
facilities, and mechanisms for traceability through digital platforms.
3.5
Environment Protection (End-of-Life Vehicles) Rules, 2025, Ministry of
En
vironment, Forest and Climate Change (MoEFCC)
Environment Protection (End-of-Life Vehicles) Rules introduce Extended Producer
Responsibility (EPR) obligations for the automobile sector. These obligations are
defined across different categories of vehicles, for different compliance periods as
based on their average life — 15 years for transport vehicles and 20 years for non-
transport vehicles. The EPR targets (Table 4) are linked to the proportion of steel
content used in the manufacturing of new vehicles for a particular compliance period.
Table 4: EPR Target as per Environment Protection (End-of-Life Vehicles) Rules, 2025
Compliance Period EPR Target (% of steel used)
2025-2030 8%
2030-2035 13%
2035-2040 (and 2040 onwards) 18%
For instance, the EPR target set for the year 2025-2026 would require the purchase of EPR certificates for a minimum of 8% steel used in vehicles manufactured in 2005- 2006 (Non-Transport) or 2010-2011 (Transport).
3.6
Scheme for Special Assistance to States for Capital Investment (SASCI),
Ministry of Finance
This assistance provided under the SASCI is aimed at increasing the pace of V-VMP implementation (Box 3.2). Incentives worth Rs 2,000 crore was extended to State Governments (on achieving V-VMP milestones in January-March 2023) under Department of Expenditure’s (DoE) Scheme for Special Assistance to States for Capital Expenditure for 2022- 23. This was extended for the period of 2023-24 and further for the period of 2024-25 under the revamped Scheme for Special Assistance to States for Capital Investment (SASCI). Seeing the relative success in adoption of vehicle testing and scrapping infrastructure in multiple states, DoE has further decided to continue this scheme for FY 26.
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 15
Box 3.2 Voluntary Vehicle Modernisation Program (VVMP)
Launched in August 2021 by MoRTH, the Voluntary Vehicle Fleet Modernisation
Programme (VVMP) aims to phase out unfit and polluting vehicles through a
structured ecosystem of ATS and RVSFs. Under the policy, private vehicles older
than 20 years and commercial vehicles over 15 years must undergo mandatory
automated fitness testing; failure to meet standards results in de-registration and
scrapping at authorized facilities. To incentivize voluntary scrapping, the policy
offers a composite incentive package: scrap value, automaker discounts; waiver
of registration fees; and state-level motor vehicle tax rebates (up to 25% for non-
transport vehicles and 15% for transport vehicles). The program is designed to foster
India’s transition to circular economy-based automotive recycling.
The SASCI, as approved by the DoE, disburses funds to state governments to
incentivise scrapping of State Government vehicles which are older than 15 years; and
to financially support waiver of liabilities on old vehicles, providing tax concessions
to individuals for scrapping of old vehicles and setting up of ATS. The funds released
under SASCI to various states are listed in Table 5.
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 16
Table 5:State-wise Fund Disbursement by DoE for SASCI
State
Funds as approved by DoE (in INR Cr.)
January 2023 – March
2023 (Scheme for
Special Assistance for
Capital Expenditure
2022-23)
April 2023 – March
2024 (SASCI 2023-
24)
April 2024
– March
2025 (SASCI
2024-25)
Andhra Pradesh - 11.50
The Budget
release
details
are yet to
be made
available.
Assam 12.6 52.40
Bihar - 60.7
Chhattisgarh - 68.6
Goa - 3.5
Gujarat - 152.5
Haryana - 50
Himachal
Pradesh
- 25
Jharkhand - 6.7
Karnataka - 116.82
Kerala - 80.4
Madhya Pradesh 75 25
Maharashtra 38.5 32.3
Mizoram - 3.5
Odisha 75 13.5
Punjab - 62.6
Rajasthan - 70.8
Uttarakhand - 33.3
Uttar Pradesh 150 71.1
Total 351 940 841
Source: MoRTH (2024) Annual Report 2023-24 and MoRTH data shared as on 11.06.2025
Government of India also modified the General Financial Rules (GFR) to mandatorily
scrap Government vehicles older than 15 years and only to be sent to formal
scrapping centres.
The details of the subsidy amount provided to states under the scheme for setting
up ATS for the FY 2024-25 are presented in the Table 6 below:
Table 6: Current Subsidy for ATS setup given in Scheme for Special Assistance to
States for Capital Investment (As per data from MoRTH provided in September 2024)
Region District Category Subsidy per ATS (in INR Cr.)
All States (Except
North-Eastern States)
Regular 3
Priority 3.6
North-Eastern States
Regular 4.5
Priority 5.4
250 priority districts identified based on fitness testing load
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 17
Box 3.3 Understanding global good practices linked to ELV
management
Table 7: Global good practices around legislation linked to ELV management
Country Legislation Mechanism Key Learnings
India
Motor Vehicles
(Registration and
Functions of Vehicle
Scrapping Facility)
Rules (2021)
Consumer - No mandatory fee at
purchase or disposal. Pays nothing
to scrap formally.
OEM – Bears certain portion of the
cost and needs to meet targets
under the newly-introduced EPR.
Recycler - RVSFs must invest in
compliant infrastructure but suffer
from low ELV inflow and poor
margins.
•
Economic viability is necessary for a successful RVSF setup.
•
Sale of spare parts form a significant portion of informal recyclers’ profits.
•
Consumer awareness is a key driver for scrapping alongside incentives.
EU
EU Directive 2000/53/EC on ELVs (2000)
Consumer - Pays nothing at ELV stage; return to authorised centres is free.
OEM - Bears full cost under
EPR. Designs vehicles for easier
recycling.
Recycler - Paid through
dismantling/scrap resale; must
meet environmental standards.
•
EPR ensures OEM accountability throughout vehicle lifecycle.
•
Consumer incentivised to scrap formally with zero cost.
•
Design-for-recycling is enforced.
Japan
Law for the Recycling of ELVs (2005)
Consumer - Pays a mandatory recycling fee upfront while purchasing vehicle.
OEM - Must manage recycling
of airbags, CFCs, and ASR using
collected funds.
Recycler - Operates under
government-approved framework;
costs reimbursed from fund.
•
Cost recovery is built-in and predictable.
•
Avoids informal disposal through prepaid system.
•
OEMs held accountable for specific high-risk components.
South Korea
Act for Resource Recycling of Electrical and Electronic Equipment and Vehicles (2008)
Consumer - No direct recycling fee; delivers vehicle to collection centre.
OEM - Shares responsibility (EPR-
inspired); must meet recovery
quotas.
Recycler - Also shares cost; must
report data quarterly; regulated
handling of ASR.
•
Shared responsibility distributes burden across value chain.
•
Strong reporting and compliance mechanisms.
•
Hybrid of EU regulation and Japan’s accountability.
USA
No national level ELV regulation exists
Consumer - May receive payment from recycler depending on vehicle condition.
OEM - No legal obligation; cost is
not directly borne.
Recycler - Bears cost but offsets via
resale of parts and scrap metal.
•
Market-driven model works when scrap has high resale value.
•
Lacks enforcement and formal infrastructure.
•
Environmental compliance ensured through strict laws for disposal of hazardous materials, e.g. oil, batteries, refrigerants.
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 18
Box 3.3 Understanding global good practices linked to ELV
management (contd.)
An RVSF in India
1
Informal Vehicle Scrapping in India
2
Vehicle Recycling Plant in Japan
3
Junk Car recycling in USA
4
Car Scrap plant in South Korea
5
Vehicle Scrapping facility in EU
6
There has been a gradual increase in the ATS and RVSF infrastructure in the country. The
incentives for scrapping, transmitted through the CoD as issued by RVSF when an ELV is
brought in for scrapping and used for providing up to 25% concession on motor vehicle
tax on registration, are intended to induce the consumer to scrap their ELVs in RVSFs, and
consequently there has been an increase in vehicles reaching RVSFs for scrapping.
1
The New Indian Express https://www.newindianexpress.com/
2
Factly https://factly.in/review-what-is-the-vehicle-scrapping-policy-all-about/
3
Keiaisha Co., Ltd https://www.keiaisha.co.jp/en/service/recycle/
4
Bonnie’s Car Crushers http://www.bonniescarcrushers.com/
5
YouTube, Amazing Korean Junkyard. Massive Scrap Car Process https://i.ytimg.com/vi/Nhf7fLZugZ4/
6
Recycling Today https://www.recyclingtoday.com/news/
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 19
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 20
4. Required ATS’s for ELV Management
4.1 Overview of Current Automated Testing Stations (ATS) Infrastructure
Central Motor Vehicles (Twenty First Amendment) Rules, 2021, defines an
“Automated Testing Station” as any automated testing facility, authorised by
the State Government, where vehicle fitness testing may be conducted through
automated vehicle testing equipment. The infrastructure requirements for an ATS
specify that any facility used for vehicle fitness testing must have a minimum per
lane area of 500 square meters for two-wheeler or three-wheeler vehicles, and 1500
square meters for Light, Medium, or Heavy Motor Vehicles. This area must include
appropriate space for administrative blocks such as a reception or information
centre, waiting area, IT server room and workstation. The Rules also mandate that
adequate provision must be made for parking and free movement of vehicles
brought for testing. Cybersecurity certifications are required for the Information
Technology systems to ensure secure access to the VAHAN database. Additionally,
facilities must provide sufficient space for installing essential utilities. Test lanes are
to be equipped with proper ventilation and a fume extraction system.
Figure 6: Infrastructure in an ATS
Source: Rabi Thankappan (2023), Automated Testing Station, Ahmedabad.
4.2 Geographical Distribution and Growth of ATS
As per the data available from MoRTH in Sep 2025, there are currently 156 operational ATS across 16 States and Union Territories but concentrated in few states like Gujarat, Andhra Pradesh, Madhya Pradesh and Uttar Pradesh (Figure 7).
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 21
Figure 7: Geographical Distribution of ATS as on 01.09.25
(Source: MoRTH)
Since FY 2023, there has been a rapid growth in the number of ATS set up every
year (Figure 8), and with the total ATS in the country expected to cumulatively be
close to the 250-mark as 114 ATS are expected to be set up in the next FY.
Figure 8: ATS setup in each FY
(Source: MoRTH)
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 22
4.3 ATS Infrastructure Requirement Analysis
An analysis was conducted using vehicle registration data from the VAHAN portal
4
,
along with the fitness testing standards for transport and non-transport vehicles
prescribed by the MoRTH. The fitness testing standards along with an assumed loss
factor is used to estimate the number of vehicles likely to come in for testing. The
estimate suggests a likely shortfall
5
in the availability of adequate infrastructure to
meet the requirements under the mandated fitness testing regime, considering each
ATS has the capacity to test 30,000 vehicles per annum. This infrastructure gap is
illustrated in Figure 9.
Box 4.1: Microeconomic Analysis of an ATS
This analysis considers the capital and operational expenditure required for establishing a two-lane ATS, designed to handle the testing of up to 100 vehicles per day, operating for approximately 300 days in a year. The average capital cost for the establishment of an ATS is reported to come out to around INR 10 Cr. For revenue estimation, an average testing fee is assumed based on the fee structure applicable to the vehicle categories with the highest testing share—primarily Light, Medium, and Heavy Motor Vehicles. Based on this approach, the financial assessment indicates that an ATS is a viable business model, with operational ATS units reporting revenue figures that are broadly consistent with these estimates.
Table 6: Cost and Revenue for an ATS
Header Value (Units)
Capital Cost per ATS (including cost of land) 10 Cr.
Operating cost per vehicle INR 400
Yearly Capacity of a single ATS 30,000 vehicles
Yearly operating cost 1.2Cr.
Average testing fee per vehicle INR 1,000
Yearly revenue for ATS 3 Cr.
Figure 9: ATS Infrastructure Gap
4
Data on vehicle registration by year, state/UT/National and year as provided on VAHAN SEWA dashboard
(https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml)
5
The visual representation on number of vehicles to be tested against testing capacity is provided in
Annexure B
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 23
Based on the methodology used in the analysis and state-wise vehicle registration
data from the VAHAN portal, the estimated requirement of ATS has been calculated
for each State and Union Territory
6
. As of now, the total projected requirement for
the coming years stands at 500 ATS till 2027, indicating a shortfall of 344 facilities
when compared to the existing infrastructure.
4.4 Various Business Models to Establish an ATS
Currently, ATS are established by State Governments through four distinct models.
These different models are briefly explained:
4.4.1 Privately owned and operated enterprise
Individual private entities—such as auto service firms, diagnostic centres, or
dealerships—can establish, own, and operate ATS facilities under the regulatory
framework. These centres must be self-financed, meet all technical, environmental,
and digital integration standards, and obtain certification from the State Transport
Authority. Full financial and operational responsibility lies with the operator, and
approval is subject to land ownership/lease compliance and digital integration
norms. This model is being followed in Gujarat currently.
4.4.2 Setup by State, operations outsourced to a private vendor
In this model, the State Government sets up the ATS infrastructure—typically using
public land or funding—while day-to-day operations are outsourced to a private
vendor selected through competitive bidding. A service-level agreement governs
performance, digital compliance, and reporting. The operator is compensated
through user charges or a revenue-sharing arrangement. Odisha has used this model.
4.4.3 Privately set up, the state selects concessionaire through bidding
Bids are invited from eligible private concessionaires to set up ATS at designated
locations, evaluated on technical and financial criteria to ensure quality and viability.
Selected concessionaires are granted exclusive operational rights for a fixed term,
typically 5–10 years. While the state may facilitate regulatory and land approvals,
the infrastructure is entirely financed and operated by the concessionaire, who must
comply with state directives on test protocols, fee structures, and digital integration.
E.g. - Punjab
4.4.4 Set up and operated through a Public-Private-Partnership (PPP) model
This Public-Private Partnership (PPP) model invites private entities to invest, build,
and operate ATSs over the long term, with the government acting as facilitator and
regulator. Operators—often capped in number—are responsible for the full project
lifecycle, using self-financed facilities on owned or leased land, and must comply
with inspection and data-sharing protocols. E.g. – Followed by most of the States
for ATS setup.
Among these, the private ownership model has demonstrated the highest level of
success. In Gujarat (which follows this model), 56 ATS have been set up under this
model, generating a cumulative revenue of INR 109 crore (Figure 10). Notably, the
top-performing ATS in the state earns approximately INR 6 crore annually.
6
Full table of ATS required all States and UTs provided in Annexure C respectively.
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 24
Figure 10: State-wise ATS Revenue
(Source - MoRTH (AFMS)) as on 01.09.2025)
4.5 Key Challenges and Proposed Solutions
The development of a formal vehicle fitness testing ecosystem to support the
circular economy of ELVs through ATS faces the following major challenges:
4.5.1 Limited creation of ATS infrastructure across the country
The rollout of ATS infrastructure critical to supporting the formal ELV ecosystem
remains limited in scale and penetration. While pilot initiatives and early adoption
are evident in a few progressive states, the pace of infrastructure development has
been slow and uneven. This limited uptake has relegated the infrastructure to a
narrow geographic and functional footprint.
4.5.2 Regional imbalance in existing infrastructure
Even where such infrastructure has been established, there exists a significant
regional skew in its distribution. Most of the operational facilities are concentrated
in a handful of states, leading to pronounced disparities in access to vehicle fitness
testing infrastructure across the country. Several large states, particularly in eastern
and North-Eastern India, currently have negligible or no operational facilities,
resulting in limited reach and low testing numbers. This regional imbalance not
only undermines the objective of creating a uniform national framework for ELV
management, but also impedes the identification of ELVs currently on-road which
need to be scrapped.
4.5.3 Improper issuance of fitness certificates
Instances have emerged in some states where ATS are operating without requisite
infrastructure, issuing fitness certificates without conducting proper tests—often in
the absence of the vehicle—through intermediaries. Such practices not only bypass
mandated testing protocols but also impose unofficial premiums on consumers
beyond MoRTH-notified fees. If unchecked, such issues pose a serious risk to road
safety and undermines the integrity of the ELV recycling ecosystem. Addressing
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 25
this challenge requires stringent auditing, regulatory oversight, and enforcement,
alongside the continued expansion of credible, accessible ATS infrastructure to curb
any malpractices.
Key Action Points
MoRTH in association with the States may undertake the following:
1) May utilise SASCI funds to adopt a privately-owned vehicle testing facility model, particularly
in regions where the market potential and ELV volume can
support such investments.
2) In states or union territories with limited vehicle population and no existing scrapping ecosystem
— such as Ladakh, Sikkim or Arunachal Pradesh — it
is suggested that government-owned infrastructure must be developed for ATS.
3)
ATS may be set up and operated in a district as per a particular business
model on the basis of the following classification with regards to vehicle density.
Table 7: Vehicle Density and ATS viability
Vehicle Density of District
Recommended Mode of Setup and
Operation of ATS
<10,000 Government owned and operated
10,000-18,000 Public-Private-Partnership mode
> 18,000 Commercially viable, privately owned
4) A goal of 1 ATS per district may be adopted for setting up an ATS infrastructure
that is sufficient to account for required testing of vehicles.
5) State Transport Departments shall conduct audits and monitor established ATS operations
and close down those ATS which are found to be violating
laid down rules and procedures.
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 26
5. Infrastructure Requirements and Other Aspects
of R
VSFs
5.1
Overview of Current Registered Vehicle Scrapping Facilities (RVSF) Infr
astructure
The Motor Vehicles (Registration and Functions of Vehicle Scrapping Facility) Rules,
2021 defines “Registered Vehicle Scrapping Facility” means any establishment which
holds a Registration for Vehicle Scrapping issued under these rules for carrying out
dismantling and scrapping operations. As per the Guidelines for Environmentally
Sound Facilities for Handling and Scrapping of End-of- Life Vehicles (ELVs), (Revised),
2023, RVSFs are required to meet comprehensive infrastructure standards to ensure
safe, environmentally sound, and efficient scrapping operations. Each facility may
be equipped with a shredder or baler for vehicle dismantling and have a designated
area for parking, depollution, dismantling, segregation, baling/shredding, and scrap
storage. ELVs must be parked on non-permeable surfaces such as asphalt, concrete,
or epoxy-coated flooring with adequate drainage. Facilities must use certified
depolluting equipment to prevent leakage during the draining of fuels, fluids, and
gases, and employ certified de-risking equipment for the safe neutralisation and
removal of airbags, pre-tensioners, and other safety components. Dedicated areas
must be provided for storing segregated scrap and reusable spares.
Figure 11: Infrastructure in an RVSF setup
(Source: Urban Acres7 )
5.2 Geographical Distribution and Infrastructure Growth of RVSFs
5.2.1 Geographical Distribution and Setup
At present, a large number of RVSFs are largely located in northern states such
as Haryana and Uttar Pradesh, while the remaining are spread in limited numbers
across other parts of the country. A possible reason is the proximity of the RVSFs
to the NCR, which has stringent restrictions regarding the plying of vehicles over
7
https://urbanacres.in/tata-motors-opens-vehicle-scrapping-unit-in-kolkata/
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 27
10/15 years of age, making it a source of potential feedstock. According to the latest
data available from MoRTH, as on 1 Sep 2025 there are currently 117 operational
RVSFs functioning across 21 States and Union Territories, with a total of 178 RVSFs
approved (including those operational) (Figure 12).
Figure 12: Geographical Distribution of RVSFs as on 01.09.25
(Source: MoRTH)
Since FY 2023, there has been a marked increase in the number of RVSFs being set
up every year, and the trend is expected to continue, helping to push new operational
RVSFs set up around the 50-mark by next financial year (Figure 13).
Figure 13: RVSF set up in each FY
(Source: MoRTH)
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 28
5.2.2 RVSF Infrastructure Requirement
Based on state-wise vehicle registration data from the VAHAN portal, the estimated
requirement of RVSF has been calculated for each State and Union Territory
8
. As
of now, the total projected requirement for 2027 stands at 227 RVSFs, indicating a
shortfall of 49 facilities when compared to the existing infrastructure.
Box 5.1 Microeconomic Analysis of RVSF
This analysis presents an overview of the capital and operating costs, as well as
revenue potential, for a Registered Vehicle Scrapping Facility (RVSF) with an
annual processing capacity of 20,000 vehicles. The average capital cost for the
establishment of an RVSF (with the cost of land and machinery for scrapping) is
estimated to be around INR 14 Cr.
Assumptions:
1. Average ELV procurement cost: ₹25,000 per vehicle
2. Operational cost of scrapping: ₹6,500 per vehicle
3. Total variable cost: ₹31,500 per vehicle
4. Kerb weight of average vehicle: 1,500 kg
5. Steel content: 60% (≈ 900 kg or ~1 tonne)
6. Scrap steel market price: ₹35,000 per tonne
Based on these assumptions, the average revenue from scrap steel per vehicle
is estimated at around ₹35,000. At 100% capacity utilisation, the RVSF model
appears commercially viable with reasonable profit margins. However, current
utilisation rates of RVSFs are reported to be below 20%, which significantly affects
their financial viability.
Considering the above, and assuming an RVSF continues operating in the current
Business-As-Usual (BAU) scenario, it can be expected to reach its break-even point
in its tenth year of operation.
Figure 14: Break-even point for an RVSF
8
Full table of RVSF required all States and UTs provided in Annexure E respectively.
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 29
5.3 Overview of Informal Vehicle Scrapping in India
Despite the push for formalisation under the Vehicle Scrapping Policy, India’s
ELV recycling landscape continues to be predominantly shaped by unregulated
or informal sector operators. These entities account for a significant share of ELV
processing due to a range of economic and structural advantages:
•
Higher economic realisation for vehicle owners: Informal scrappers typically offer higher upfront scrap value by bypassing environmental compliance costs and taxes.
•
Low transaction and access costs: Informal units are geographically dispersed,
embedded in local economies, and easily accessible compared to formal RVSFs.
• Limited enforcement and awareness: The absence of mandatory de-registration and traceability for vehicles allows continued diversion toward informal channels.
The informal scrapping sector has historically served as the backbone of India’s
ELV ecosystem,
offering widespread coverage across peri- urban and rural areas and generating employment for low-skilled labour. For decades, these operators have functioned as the primary handlers of ELVs, facilitating dismantling, material recovery, spare parts reuse, and feeding downstream scrap markets. Their continued contribution to the resource economy underscores the importance of recognising their role in the transition towards a circular and sustainable ELV framework.
A balanced approach to formalisation must focus on inclusion rather than penalties.
Quick integration of informal operators into the formal ecosystem may be enabled
through targeted measures such as capacity building, technical training, access to
modern dismantling tools, and facilitation into OEM-linked RVSF networks. Simplified
licensing, access to finance, and regulatory compliance support have been extended
in an effort to ensure meaningful participation of this segment in the formal value
chain.
Since the launch of the vehicle scrapping policy, MoRTH has engaged in investor
promotion across 30 States and UTs. Of the 98 RVSFs currently operational, many
RVSFs are those which have transitioned from the informal sector. These include
small enterprises with limited turnover; entities affiliated with OEMs, dealerships,
and service providers, as well as entrants from non-automotive sectors. MoRTH
continues to onboard informal players through investor facilitation and MoUs to
strengthen the formal ELV ecosystem.
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 30
Box 5.2 Informal ELV Scrapping in India
A ground survey conducted in May 2025 across 17 States and Union Territories,
covering over 200 informal scrapping units, revealed that despite lower upfront
pay-outs, RVSFs tend to deliver greater overall benefits to citizens in terms of
safety, compliance, and environmental standards. Based on the survey, the
informal sector is estimated to have an annual scrapping capacity of around 2–3
lakh ELVs, whereas RVSFs scrapped approximately 72,000 vehicles in FY 2024–
25, accounting for nearly 25% of the informal sector’s scale.
Figure 15 highlights 25 identified informal clusters engaged in end-of-life vehicle
(ELV) handling and related activities across various regions of the country.
Figure 15: Current Informal Clusters for Vehicle Scrapping
(Source: MoRTH)
5.4 Bridging the Informal-Formal Price Gap
A significant price difference—estimated in the range of 60% to 65%—continues
to exist between informal and formal ELV disposal channels. This gap significantly
influences the decisions of vehicle owners, who are more likely to opt for informal
operators that do not adhere to prescribed environmental and safety norms, thereby
undermining the sustainability objectives of the government.
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 31
Insights from primary research and stakeholder consultations, particularly with
RVSFs, indicate that informal operators consistently offer higher prices to ELV
sellers. This pricing advantage stems from several factors:
• Minimal investment requirements and operating costs
• Evasion of GST
• Non-compliance with environmental standards
• Resale of spare parts
A sample analysis below considers the example of a Swift Dzire-equivalent car
of approximately INR 7 lakh available for scrapping. The seller of the car has two
options: The informal sector can offer a price of around INR 38,000 whereas an RVSF
would be able to offer a price of INR 23,000. This price differential of approximately
₹15,000 presents a price differential that needs to be addressed through targeted
interventions, incentives, and regulatory enforcement to shift ELV flows towards
formal and environmentally compliant scrapping channels.
Given this price differential, two key issues need attention —
i) Profit margin available to the RVSF
ii) Limited perceived value for the consumer (the ELV seller)
Addressing these will help RVSFs offer better prices for ELVs, knowing they can
recover good value, and encourage consumers to choose authorised scrapping
centres to understand the overall benefits they receive by accessing formal scrapping
facilities.
5.4.1 Price Differential - RVSF Perspective
The possible revenue streams from processing a single ELV, based on the example
given above, at an RVSF is presented in Figure 16. To bridge the price differential of
INR 15,000, potential value added of INR 9,500 or more can be generated from sale
of used spare parts, and up to INR 5,500 from Extended Producer Responsibility
(EPR) credit sales. It highlights the need to unlock the full value chain to make RVSFs
price-competitive with informal sector players.
Figure 16: RVSF-Informal Scrapper Price Differential – RVSF Perspective
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 32
5.4.1.1 Sale of spare parts by RVSF
The sale of re-used, refurbished, and remanufactured spare parts from ELVs, based
on internal analysis and stakeholder interaction, has emerged as a significant source
of revenue in the informal scrapping sector, driven especially by the increasing
demand for low-cost vehicle replacement parts
9
, ease of vehicle reparability and
increasing number of vehicles on road. However, there are certain challenges in sale
of salvaged spare parts in India due to the largely unorganized market, regulatory
restrictions on parts usage, lack of an established system for certifying reusable
parts and the absence of systems to track and verify the origin, condition, and
history of salvaged parts. This undermines transparency and reliability for a user of
such second life parts.
While the sale of spare parts is already prevalent as a business model, it currently
takes place outside the purview of formal regulation and is usually recorded under
the sale of bulk scrap by RVSF. The spare parts sold as bulk scrap end up finding
their way to informal part dealers. Formalising the spare parts ecosystem enables
spare parts to be refurbished and sold with measures for proper accounting and
certification. This will serve to add value to the spare parts industry as well.
Box 5.3 Reuse, Refurbishment and Remanufacture of Vehicle Spare
Parts
Re-use
Re-use of vehicle spare parts refers to the practice of taking parts
from end-of-life vehicles, reconditioning them, and then using them as
replacements in other vehicles. For effective re-use, it is integral that
used components do not cause any safety or environmental risks.
Refurbish
Refurbishing vehicle spare parts involves restoring used auto parts
to a like-new or near-new condition. This process typically includes
thorough cleaning, inspection, repair, and sometimes the replacement
of worn components.
Remanufacture
Remanufacturing of vehicle spare parts refers to the industrial process
of restoring used, worn, or discarded automotive components to a
condition that meets or exceeds original equipment manufacturer
(OEM) specifications, using a standardized and controlled procedure.
9
A list of spare parts for a car along with their prices is given in the Appendix.
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 33
5.4.1.2 Sale of EPR Certificates
The sale of Extended Producer Responsibility (EPR) certificates by RVSFs, through
transactions with vehicle manufacturers as obligated under the Environment
Protection (End-of-Life Vehicles) Rules, 2025 notified by the MoEFCC, is expected
to provide the necessary financial buffer to ensure operational sustainability and
incentivise formalisation of ELV scrapping activities. The revenue gap with the
informal scrappers is estimated to be reduced by INR 5,500 to enhance the financial
viability of RVSFs.
The EPR mechanism, therefore, serves as a market-based policy instrument aimed
at ensuring the financial viability of end-of-life material recovery across sectors as
a part of India’s circularity roadmap. For ELVs, the principle remains consistent—by
placing end-of-life processing responsibility on producers, EPR creates a compliance-
driven demand for certificates, thereby transferring part of the financial obligation
to OEMs and encouraging sustainable product lifecycle management.
However, it is imperative to revisit and refine certain provisions under the current
EPR framework for ELVs. The current EPR targets have been intentionally kept
low to account for the initially limited inflow of ELVs to RVSFs. While this reduces
compliance pressure on OEMs, it also limits the economic viability of RVSFs, as
the volume of EPR credits generated remains insufficient to create a meaningful
revenue source for RVSFs. To strengthen the formal scrapping ecosystem, a
differentiated approach to EPR is warranted—retrospective EPR targets may remain
modest, increasing gradually with time; more ambitious prospective targets may be
introduced in line with the projected increase in ELV feedstock, supported by the
expansion of ATS/RVSF infrastructure and regulatory enforcement. A suggested
regime for retrospective EPR targets against current EPR target and compliance
periods is given in Table 8
10
. Additionally, the inclusion of EPR certificate generation
from automotive production scrap—as currently permitted—may dilute the intended
outcomes of the policy and its inclusion may be allowed as an additional source
of EPR certificates besides the mandatory 8% under EPR notification. The EPR
framework must focus exclusively on actual ELV recycling, to drive investments
into formal scrapping infrastructure, and ensure alignment with circular economy
objectives.
Table 8: Suggested Revisions to Current EPR Regime
^ Year of manufacture of vehicles from which steel is to be recovered
10
A visual representation of steel recovery from current and suggested EPR regimes against total RVSF
capacity currently approved (as per MoRTH data) is provided in Annexure F
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 34
Prospective targets for cars currently manufactured need to be revised upwards
significantly to cope with the volume of expected ELVs in the future. One such
prospective EPR regime is highlighted in Table 9, which may be adopted after due
deliberations with stakeholders by MoEFCC.
Table 9:Prospective EPR Targets
^Year of manufacture of vehicles from which steel is to be recovered
5.4.2 Benefits Accrued to Consumers
Based on Figure 16, when the price gap between informal scrappers and Registered
Vehicle Scrapping Facilities (RVSFs) is bridged, formal scrapping becomes
competitive and enables RVSFs to offer comparable prices to consumers. As
illustrated in Figure 17, the potential consumer benefit from scrapping a vehicle
through an RVSF is ₹38,000. Further, the consumer can receive an additional
benefit of ₹22,500 through the Certificate of Deposit (CoD) and showroom (OEM)
discounts on the purchase of a new vehicle.
figure 16
Figure 17: Benefits Accrued to Consumer
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 35
5.4.2.1 Certificate of Deposit (CoD)
Currently, 21 States/Union Territories
11
have so far as on 1 Sep 2025 declared Motor
Vehicle (MV) Tax concessions on purchase of a new vehicle against CoD. The
majority of states have adopted the MoRTH-recommended CoD concessions model
(Table 10), although the implementation of concessions is not uniform:
MV Tax Concession
Transport Vehicle Non-Transport Vehicle
• 15% of tax leviable • 25% of tax leviable
The Central Motor Vehicles (First Amendment) Rules, 2025 offers concession up
to 50% of tax leviable for:
• All transport and non-transport vehicles which are manufactured as per BS-I and earlier emission norms
•
All medium and heavy goods motor vehicles and all medium and heavy passenger motor vehicles which are manufactured as per BS-II norms
The provision for the CoD’s Motor Vehicle (MV) Tax concession is a substantial
amount. For the example as seen in Figure 17, upon purchase of a new car worth INR
7 lakh, MV tax of ~7% needs to be paid
12
. This amounts to INR 49,000. With the CoD,
a 25% discount will be offered, amounting to INR 12,000. If implemented across all
states, the concession on MV Tax would have a significant motivation in driving ELVs
towards the formal scrapping ecosystem. MoRTH has recently issued a notification
which would increase the recommended CoD concessions up to 50% of MV tax,
against CoD for all transport and non-transport vehicles which are manufactured
as per BS-I norms and all medium and heavy goods and passenger motor vehicles
which are manufactured as per BS-II norms. This would further increase the incentive
of consumers scrapping their vehicles at RVSFs. It is important to note, that the
transmission of benefits due to CoD are dependent on the sequence of the buy/sell
cycle by the consumer (Table 11).
Table 11: Different Kinds of Consumers who scrap ELV
S. No. Consumer Behaviour Expected Gain from CoD
Expected Gain
from OEM
Discount
1 Sell first and buy laterINR 12,000 or more
INR 10,000 or
more
2 Buy* first and sell later
Monetise ELV certificate
on DigiELV (INR
4000~8000)
No discount
available
3 Does not buy at all
*Buy implies a new vehicle is bought
11
A summary table of CoD MV Tax concessions as declared by various states is provided in the Annexure H
12
As per norms in the National Capital Territory of Delhi
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 36
Box 5.4 DigiELV Process for Purchase of CoD
Process for Selling a Certificate of Deposit (CoD):Process for Selling a Certificate of Deposit (CoD):
User may access the DigiELV portal through registered credentials to sell CoD to
interested buyer
Process for Buying a Certificate of Deposit (CoD):Process for Buying a Certificate of Deposit (CoD):
Interested buyer may access the DigiELV portal through registered credentials and
offer bids for buying CoDs listed by sellers
The purchased CoD is transferred to the buyer’s account and can be used for:
• Availing vehicle scrappage incentives
• Applying for benefits during new vehicle registration
Table 12: Transaction Volume of CoDs in DigiELV and their Average Price as on 01.09.2025
Category Total Trades Average Trade Price (`)
2-Wheeler (Non-Transport) 777 1,824
3-Wheeler (Transport) 17 1,677
4-Wheeler Invalid Carriage3 7,782
Heavy Goods Vehicle 148 9,351
Heavy Passenger Vehicle 5 9,007
Light Goods Vehicle 452 3,132
Light Motor Vehicle (Non-
Transport)
69,390 10,814
Light Passenger Vehicle 390 5,972
Medium Goods Vehicle 8 7,594
Medium Motor Vehicle 3 6,533
Others/Unspecified 3 1,068
Total Market 71,196 10,634
5.4.2.2 Showroom Discount from Automobile OEMs
The Hon’ble Minister for Road, Transport and Highways had announced on 27 Aug
2024 the provision of discounts ranging from 1.5-3.5% (about Rs 10,000 to Rs 24,500
for a 7 lakh car) by automobile OEMs on new vehicles purchased against proof of
scrapping of ELV, to bridge the gap in incentives between formal and informal ELV
disposal and encourage ELV scrapping at RVSF. However, transmission issues with
the OEM discount are apparent as vehicle dealerships tend to club multiple discounts
together, with limited visibility to OEMs on the additionality of the discount offered
against CoD.
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 37
5.5 Key Challenges and Proposed Solutions
5.5.1 Limited adoption of infrastructure across the country
The rollout of RVSF critical to supporting the formal End-of-Life Vehicle (ELV)
ecosystem remains limited in scale and penetration. While rapid growth of RVSFs has
been seen adopted in a few progressive states, the pace of scrapping infrastructure
development has been slow and uneven. This limited uptake has constrained the ability
to transition away from informal sector dominance, relegating formal scrapping to a
narrow geographic and functional footprint.
5.5.2 Regional imbalance in existing infrastructure
There exists a significant regional skew in RVSF distribution. Most operational facilities
are concentrated in a few states, leading to pronounced disparities in access to formal
ELV scrapping infrastructure across the country. States, particularly in eastern and
North-Eastern India, currently have negligible or no operational facilities, resulting in
limited reach and low consumer uptake of formal scrapping channels. This regional
imbalance not only undermines the objective of creating a uniform national framework
for ELV management, but also impedes the realisation of environmental, economic,
and safety benefits associated with formal scrapping practices.
5.5.3 Registration and compliance process for RVSF
The current process for registration of an RVSF involves multiple authorities (SPCB
and State Transport Commissioner), leading to delays and inefficiencies, adding
to the compliance burden thereby hindering smooth setup of RVSF. There is no
standardized and clear procedure for certifying RVSF equipment as mandated by
MoRTH, resulting in ambiguity for both businesses and regulators. It is suggested that
MoRTH allow State Transport Commissioners to give deemed approval if the RVSF
can obtain Consent to Operate (CTO)/Consent to Establish (CTE) from the relevant
SPCB to ease out the approval procedure for establishing an RVSF. The creation of a
single certifying authority with clear standards and procedures for RVSF equipment
certification would ensure consistency and reliability.
5.5.4 Limited ELV feedstock reaching RVSFs
At present, RVSFs across the country are operating at suboptimal capacity due
to insufficient inflow of ELVs. Despite the establishment of formal scrapping
infrastructure in select states, the volume of vehicles reaching these facilities remains
low. A substantial proportion of ELVs continues to be diverted to informal channels,
driven by lack of awareness, weak enforcement of de-registration norms, and absence
of strong economic incentives for owners to opt for formal scrapping. The resulting
underutilisation directly impacts the business viability of RVSFs, constraining their
ability to recover fixed costs, invest in skilled manpower, and maintain environmentally
sound operations as per regulatory standards.
5.5.5 Intense competition from informal sector operators
Informal scrappers typically offer vehicle owners a higher price for ELVs due to
lack of necessary compliance-related costs. They enjoy greater ease of access and
convenience due to their localised presence. This cost advantage continues to
divert ELVs away from RVSFs, thereby eroding the economic case for formalisation.
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 38
Key Action Points
MoRTH in association with the CPCB may undertake the following reforms:
Enhancing Accessibility and Coverage of RVSFs
1) Government-operated or PSU-led RVSFs may be established in regions where
private facilities are not commercially viable, with capital investment borne by
the government or PSU and operations managed by a private concessionaire
under a structured concession agreement to ensure wider national coverage.
Easing set-up proc
ess for an RVSF
1)
MoRTH may make modifications in Motor Vehicles (Registration and Functions
of Vehicle Scrapping Facility) Rules, 2021 to:
a. Allow a single approval authority for RVSF set-up by authorising State Transport Commissioners to give deemed approval if the RVSF can obtain CTO/CTE from the relevant SPCB.
b. Establish a single certification authority for RVSF equipment.
Addr
essing Informal Vehicle Scrapping
Recommendations for concerted initiatives by MoRTH, CPCB and SPCBs are as follows:
1)
Informal vehicle dismantling clusters may be encouraged to transition to the formal sector through structured incentive mechanisms, followed by regulatory measures, ensuring a phased and inclusive approach.
a.
MoRTH, in collaboration with SPCBs may undertake onboarding of identified
informal vehicle scrapping clusters within a defined timeline.
b. Part of SASCI may be apportioned to informal sector integration against
a strict timeline supported by awareness campaigns and streamlined compliance support.
c.
Udyam Assist Platform of Ministry of Micro, Small & Medium Enterprises
(MoMSME) may be utilised to help in onboarding the informal scrappers.
d. State governments may provide a one-time waiver of outstanding
environmental liabilities, thereby enabling informal operators to overcome initial financial and regulatory entry barriers.
e.
State Government may consider establishment of common de-pollution
facilities for small dismantlers operating in informal clusters to ensure environmental safeguards and cost-effective shared infrastructure.
f.
Inter-ministerial consultation by MoRTH with NITI Aayog, MoEFCC and MoMSME may
be initiated to develop action plan/scheme for formalising
the informal vehicle dismantling sector.
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 39
Key Action Points (contd.)
Enhancing RVSF Business Viability
The following action points for MoRTH include:
1) Spare Parts Ecosystem –
a. A dedicated committee may be constituted by MoRTH to strengthen the
ELV-based spare parts reuse ecosystem involving, MHI, SIAM and ACMA.
i. It may recommend certification standards, operational guidelines, and
policy measures.
ii. Current rules (such as Automotive Industry Standard (AIS)-129, which contains a negative list of spare parts prohibited for re-sale) may be updated to accommodate harvesting of spare parts for refurbishing.
iii.
A regulated marketplace for the sale of such spares may also promote their use extensively.
iv.
Vehicle components may be designed with ease of disassembly, standardisation, and
modularity in mind, enabling efficient reuse and
repair.
2) Extended Producer Responsibility (EPR)
a. May be strengthened by raising recovery targets, both prospective and retrospective, in view of increase in RVSF capacity and expected feedstock. (Section 5.4.1.2, Table 8 and 9)
b.
Inclusion of automobile production scrap as eligible for EPR may be revisited.
3)
Certificate of Deposit (CoD) – Uniform best-practice concessions for CoD
may be adopted consistently across all States and Union Territories.
4) Showroom Discounts – Vehicle showroom quotation booklets should include
a dedicated column showing discounts availed through CoD separately, ensuring transparent benefit transmission.
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 40
6. Simplifying Vehicle-Owner Related Procedural
Issues
The VAHAN database keeps the record of all vehicle ownership but can be accessed only
through RTO office for even minor transactions. This chapter looks into the systematic
reforms to enable a user to access VAHAN in a more citizen friendly approach.
6.1 De-registration process of ELV from VAHAN database
Currently, de-registration can happen with or without the involvement of RVSFs. The
documents required for de-registration are original Registration Certificate (RC),
chassis number cut out from vehicle, physical evidence of scrappage and affidavit
of no dues and legal pending cases. A large proportion of ELVs remain officially
registered despite having been scrapped, resulting in discrepancies within the vehicle
registry. Vehicle owners normally do not initiate the de-registration process, as there
is currently no legal or financial penalty for failing to do so. Moreover, when such
vehicles are scrapped informally outside authorised channels, Regional Transport
Offices (RTOs) are unable to verify whether scrappage has actually occurred.
Currently, legal liability lies with the consumer in whose name the car is registered
in case the vehicle is used for any nefarious activities. Consumer needs to be made
aware about consequences associated with vehicles scrapped through informal
sector without formal de-registration. The submission of the CoD as mandatory
documents for vehicle de-registration shall be mandated to ensure proper tracking
and verification.
6.2 Enhancing the VAHAN portal
The VAHAN portal, developed by MoRTH, is a centralized platform for managing
vehicle registration, taxation, and compliance in India. The presence of a large
number of informally scrapped vehicles which still have not been de-registered
and data inaccuracies due to vehicles which were de-registered before VAHAN
was functional, compromises the integrity of the database. The portal’s complex
navigation, data security concerns, and lack of adequate customer support hinder
user experience. The vehicle ownership transfer and penalty resolution processes
are complex and cumbersome.
Recently, MoRTH has taken steps to optimise transparency and data quality; and
improve the Ease of Doing Business through digital portal enhancements on the
VAHAN platform. An unfit vehicle dashboard has been introduced for RVSFs and
Regional Transport Offices (RTOs) to support enforcement efforts (Figure 18).
Additionally, a government vehicle dashboard, providing access to data on vehicles
older than 15 years, has been made available to State Transport Commissioners. A
scrap value discovery module has been launched on V-Scrap to benefit both citizens
and RVSFs; to address the absence of any accessible mechanism to get a transparent
valuation of the ELV by consumers, which leads to information asymmetry in decision
making. Furthermore, automated fitness reports are now generated through an end-
to-end encrypted system to ensure improved compliance.
There still remain specific issues that may be addressed in the interest of creating
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 41
a more accessible ELV management ecosystem for consumers. This will streamline
the process and ensure accountability on part of the vehicle owner during ownership
transfer and vehicle scrapping.
Figure 18: Unfit Vehicle Dashboard (Visible to RVSF owners and State Administration
on V-Scrap Portal)
(Source: VAHAN V-Scrap Portal User Manual)
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 42
Key Action Points
MoRTH may undertake the following:
Strengthening the Vehicle Deregistration Framework
1) May mandate that deregistration of vehicles at Regional Transport Offices
(RTOs) shall only be permitted upon submission of a CoD issued by a RVSF,
ensuring formal end-of-life disposal, with certain exceptions.
2) May introduce a legal obligation based on both incentives and disincentives
on vehicle owners to initiate compulsory deregistration of ELVs, to ensure responsible disposal and formal processing.
a.
Rule 55 of The Central Motor Vehicles Rules, 1989 makes transfer of ownership a legal mandate, but the vehicle owner has no liability except in the case where the vehicle is used for illegal purposes after ownership transfer.
Enhancing the VAHAN P
ortal
1)
Removal of old data – Removal of registered vehicles which are identified as
no-longer plying on roads from the VAHAN database.
2) Introduce Aadhar-based ownership transfer and penalty accrual of vehicles –
a. Aadhar OTP-based transactional handshake to authenticate vehicle transfer between buyer and seller. (See Box 6.1)
b.
Aadhar based checks will provide a framework to eliminate need for physical visits
to Regional Transport Office (RTO) for vehicle-related
transfers.
c. All penalties may be accrued to the Aadhar of the vehicle owner rather than the vehicle itself.
3)
Integration of DPI into VAHAN portal - Application Programming Interface
(APIs)/Digital Public Infrastructure (DPI) may be used to synchronize data with other sources like FASTag, service centres, petrol pumps etc. ensuring accurate and up-to-date information.
4)
Integration of ELV valuation module in VAHAN portal - Scrap value discovery
on the V-Scrap portal may be enhanced using a Kelley Blue Book–like model to enable fair and standardised ELV valuation.
5)
Information dissemination/booking service for RVSF/ATS –
a. Development of marketplace for related services, such as disposal services,
ATS certifications, etc. to enhance functionality and user experience.
b. Provision of 24/7 AI-driven customer support through a chatbot to improve user assistance and resolution time.
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 43
Box 6.1 Aadhar-Based Ownership Transfer
Figure 19: Aadhar-based Vehicle Ownership Transfer
For procedural ease and efficiency in vehicle ownership transfers, it is important
to adopt mechanisms that eliminate the need for all transactions to be physically
conducted at an RTO, while still ensuring that the transfer is duly recorded in the
VAHAN database. The Aadhar OTP-based transactional handshake serves this
purpose by enabling secure, remote authentication of both parties in the transfer
process.
The process begins with the seller (vehicle owner) logging into the VAHAN portal
and validating the vehicle’s registration number, chassis number, or Aadhar through
an OTP. The seller then opts to transfer ownership of vehicle and enters the buyer’s
details, including name and mobile number linked to Aadhar. An OTP is sent to the
buyer’s registered mobile number to link their Aadhar with the vehicle registration
number. The buyer validates the transfer by entering the OTP. Once validated, the
buyer is onboarded on VAHAN and provides any additional details required for
generating a new RC from their selected local RTO. The seller pays the transfer fee,
and the information is passed to the RTO for issuance of the new RC, completing
the authenticated transfer process.
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 44
7. Strengthening Consumer Awareness on
R
ecycling Ecosystem
7.1 Lack of Consumer Awareness
A lack of consumer awareness is an important reason for the limited inflow of
vehicles to RVSFs. To address this issue, a continuous and targeted dissemination of
information related to vehicle scrapping and the role of RVSFs may be institutionalized
across all relevant stakeholders. While the overarching communication strategy may
be led by the MoRTH, collaborative efforts of OEMs, RVSFs, and State authorities
are essential.
7.2 Communication strategy
To enhance awareness and drive greater adoption of formal scrapping practices,
MoRTH may scale up national-level outreach campaigns through both print and
digital media. Leveraging the VAHAN database, the Ministry may send targeted
communications to vehicle owners whose vehicles are nearing ELV status.
Additionally, periodic alerts can be issued to registered vehicle owners encouraging
them to voluntarily scrap their vehicles at authorised RVSFs.
OEMs play a critical role in building consumer awareness at the point of sale and
beyond. It is recommended that OEMs mandatorily inform all new vehicle buyers
about the vehicle scrapping process and the availability of RVSFs. Further, they
may actively reach out to existing customers through SMS and email alerts, offering
trade-in incentives linked to scrapping. OEMs may also collaborate with RVSFs to
ensure a seamless and user-friendly scrapping experience.
RVSFs themselves must undertake sustained public engagement efforts. These
may include regular awareness campaigns and targeted advertisements aimed
specifically at ELV owners. RVSFs can further expand their reach by partnering
with automotive brands, dealerships , and fuel stations. Establishing collaborative
arrangements with OEMs would also facilitate smoother scrapping transactions and
improve consumer trust in the formal scrapping ecosystem.
All stakeholders—must jointly ensure that the list of authorised RVSFs and ATS
is readily available on the official websites of RTOs, state transport departments,
OEMs, and RVSFs. This step will provide vehicle owners with easy access to reliable
information and encourage greater participation in the formal ELV disposal process.
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 45
Key Action Points
Public Awareness
MoRTH, MoEFCC and MHI may undertake public awareness initiatives:
1) Awareness campaigns may explicitly highlight the responsibility of the
vehicle owner to de-register ELVs once sold or retired, to prevent misuse
and promote legal compliance.
2)
Promote vehicle scrapping during key national events such as Recycling Day, Upcycling Day, and other relevant public initiatives.
3)
Promotion of vehicle scrapping as a responsible practice by senior leadership during public outreach forums.
4) OEM’s to promot formal recycling for the old cars of new buyers.
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 46
8. Other Innovative Interventions
While the important initiatives to bridge the financial difference between informal and
formal sector as well as legal measures have been discussed in the earlier chapter, this
explores innovative ideas to supplement the existing framework to support the RVSFs.
The following may be taken up by the relevant ministry as per their merit.
8.1 Carbon Credits
The scrapping of ELVs presents a significant opportunity for emissions reduction
through the environmentally sound dismantling and material recovery of metals,
plastics, glass, and other components. Unlike unsustainable disposal practices,
formal recycling undertaken by RVSFs results in measurable emission savings. These
savings can be monetised through the generation and sale of carbon credits in
offset mechanism of Indian Carbon Market (ICM), voluntary or international carbon
markets, thereby creating a supplementary revenue stream for RVSFs—estimated at
approximately ₹2,000 per vehicle. To enable this, there is a critical need to develop
and ratify a robust, scientifically sound methodology
13
for quantifying emissions
avoided through ELV scrapping. Integrating RVSFs into the ICM and facilitating their
participation in the Voluntary Carbon Market (VCM) will enhance their economic
viability and enable the transmission of benefits to ELV owners in the form of more
competitive scrap valuations.
8.2 Vehicle Insurance as a Lever
Vehicle insurance can serve as a powerful instrument to incentivize the timely and
environmentally sound disposal of ELVs. Currently, ELVs, towards the end of their
useful life, remain uninsured and unfit for road use, owing to the absence of strict
enforcement of compulsory insurance of vehicles plying on road. As the vehicles
get older, the insurance premium must reflect the increased risk of accidents of the
vehicle beyond a certain age. Thus, increasing cost of ownership, say after 15 years
of vehicle life, would act as an incentive to scrap the vehicle in a timely manner.
Additionally, the absence of a structured pathway for integrating Total Loss Vehicles
(TLVs) into the ELV ecosystem creates a critical gap in inflow. Measures are required
to ensure that only roadworthy vehicles with valid insurance ply on roads, while
directing vehicle owners without proper documentation to scrap their ELV at RVSFs.
8.3 GST
The current taxation framework applicable to the formal ELV scrapping value chain
is marked by non-uniform GST rates across different stages— it ranged from 12%–
18%
14
on ELV procurement; it was 18% on the sale of metal scrap; and was 28% on
the resale of spare parts. With the announcement of the new GST slabs by the GST
Council, effective from 22 Sep 2025, the GST applicable on the above products would
still be falling into two non-uniform tax slabs – 5% and 18%. Most of the products
as mentioned above would fall under the 18% slab. In contrast, informal operators
face no comparable GST obligations, creating a cost disadvantage for RVSFs. A
13
A detailed methodology as prepared by Meta Materials Circular Markets (MMCM) is included in Annexure.
14
GST rate depends on engine capacity of ELV.
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 47
reduction in their GST rates would help promote parity and support formalisation.
Notably, the 54th GST Council meeting introduced the Reverse Charge Mechanism
(RCM) on the supply of metal scrap from unregistered dealers to registered recyclers.
The Reverse Charge Mechanism under GST shifts the liability to pay tax from the
supplier to the recipient of goods or services, instead of the seller collecting GST. It
is applied to specified goods and services, especially when the supplier is from the
unorganised sector, to improve tax compliance and widen the tax base. Extending
RCM provisions to ELV procurement could further prevent dual taxation on RVSFs.
While a uniform GST rate cut would require broader structural reform, targeted
rationalisation of rates for the ELV sector—especially for spare parts and scrap—
would significantly ease financial pressure on RVSFs and incentivise formal market
participation.
Key Action Points
Carbon Credits
BEE may undertake the following measure:
1)
Ratify methodology for generation of carbon credits from ELV for participation
in ICM and VCM.
Vehicle Insur
ance
MoRTH, in association with IRDAI (Insurance Regulatory and Development
Authority of India) may undertake the following measures:
1)
Insurance coverage may be subject to higher premiums in cases where vehicles are clearly ELVs.
2) Mandatorily require all TLVs declared by insurers to be transferred to RVSFs.
3)
May undertake consultations with insurance companies and enable system-
level integration with VAHAN.
4) Uninsured vehicles found plying on roads may face stringent penalties and
charged an amount equal to or a significant multiple of their insurance premium.
GST
MoRTH may represent to GST Council to undertake the following:
1)
Extend Reverse Charge Mechanism (RCM) to ELVs.
2) Revisit the GST rates on ELVs and the sale of scrap metal and spare parts
from ELVs.
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 48
9. Conclusion - Summary of Recommendations
As India advances towards a more resource-efficient and environmentally sound
mobility sector, the transition to a formal End-of-Life Vehicle (ELV) recycling
ecosystem presents both a pressing necessity and a transformative opportunity. This
report has identified key structural, regulatory, and market-related gaps in the current
framework, and outlined a comprehensive set of actionable recommendations aimed
at strengthening the circular economy of ELVs. Table 13 provides a consolidated
summary of these recommendations across policy, infrastructure, finance, awareness,
and compliance domains to enable coordinated and effective implementation by
relevant stakeholders.
Table 13: Summary of key recommendations and implementation agency
Recommendation Implementation Agency
Inadequate ATS Infrastructure and Testing Parameters
1) Utilise SASCI funds to adopt privately-owned vehicle testing facility model, in regions where the market potential
& ELV volume can support such
investments.
2) In states or union territories with limited vehicle population and no existing scrapping ecosystem, government-owned
infrastructure may be
developed.
3) ATS may be set up and operated in a district as per a particular model on the basis of its vehicle density.
4)
A goal of 1 ATS per district may be adopted.
5) Audit ATS operations and close down ATS generating spurious
fitness certificates and charging
non-government rates.
Timeline: Six months
State Governments
and MoRTH
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 49
Recommendation Implementation Agency
RVSFs – Setup and Informal Sector issues
1) Government-operated or PSU-led RVSFs may be established in
regions where private RVSFs not commercially viable to ensure
wider national coverage.
2) Modifications may be made in Motor Vehicles (Registration and
Functions of Vehicle Scrapping Facility) Rules, 2021 to:
a. Allow a single approval authority for RVSF set-up.
b. Establish a single certification authority for RVSF equipment.
Timeline: One y
ear
MoRTH,
CPCB,
SPCB
1)
Onboarding of identified informal vehicle scrapping clusters.
2) Part of SASCI may be dedicated to informal scrapper integration
with awareness campaigns and streamlined compliance support.
3) Udyam Assist Platform of the MoMSME may be utilised to help in onboarding of informal scrappers.
4)
One-time waiver of outstanding environmental liabilities to informal operators, enabling them to overcome initial compliance barriers.
5)
Establishment of common de-pollution facilities for smaller dismantlers operating within informal clusters to ensure environmental safeguards and cost-effective shared infrastructure.
6)
Inter-ministerial consultation by MoRTH involving NITI Aayog, MoEFCC and
MoMSME may be initiated to develop an action plan/
scheme for formalising the informal vehicle dismantling sector.
Timeline: One year
MoRTH,
CPCB,
SPCB
RVSFs – Bridging the Price Differential
1) Formation of a committee for formalising the spare parts business.
Timeline: T
hree months
MoRTH,
ACMA,
SIAM,
MHI
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 50
Recommendation
Implementation
Agency
1) EPR may be revised for retrospective targets as
well as increased prospectively in consideration
of increasing RVSF capacity and utilization and
increasing number of ELVs arriving in the market
in future.
2)
Inclusion of automobile production scrap as eligible for EPR to be revisited.
Timeline: T
wo years
MoEFCC
1)
The best-case CoD benefits model may be adopted
uniformly by all states.
Timeline: Six months
MoF
1) Quotation booklet for vehicle showroom price
may explicitly show discounts availed from CoD separately so that benefits are transmitted transparently.
Timeline: Six months
MoRTH, SIAM, OEMs
Simplifying Procedural Issues
1)
De-registration of vehicles at RTO shall only be permitted upon submission of CoD issued
by
RVSF, with certain exceptions.
2) Explore legal obligation on vehicle owners to initiate compulsory deregistration of ELVs to ensure responsible disposal and formal processing.
Timeline: One y
ear
MoRTH
VAHAN Upgradation
1)
Removal of old data from the database.
2) Introduce Aadhar-based ownership transfer and
penalty
accrual of vehicles on owner rather than
the vehicle.
3)
Integration of DPI into VAHAN portal.
4) Integration of ELV valuation module in VAHAN portal.
5)
Information dissemination/booking service for RVSF/ATS.
6)
Enhance scrap value discovery module on V-Scrap portal similar to Kelley Blue Book model.
Timeline: T
wo year
MoRTH
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 51
Recommendation
Implementation
Agency
Increasing Public Awareness about ELV Recycling Ecosystem
1) Adopt a detailed communication strategy to disseminate
information on vehicle scrapping.
Timeline: Six months
MoRTH,
OEMs,
RVSFs
1)
A list of RVSFs and ATS to be displayed on the website of all RTOs, central and state transport departments, RVSF and OEM websites.
Timeline: Six months
MoRTH, State
Transport
Departments,
OEMs, RVSFs
1)
Emphasize importance of de-registering ELV by owner in awareness campaigns.
2)
Promotion of vehicle scrapping on events such as Recycling Day, Upcycling Day, etc.
3)
Promotion of vehicle scrapping as a responsible practice during public outreach forums.
Timeline: Six months
MoRTH,
MoEFCC,
MHI
Other Int
erventions
1)
Ratify methodology for generation of carbon credits from ELV for participation
in Indian Carbon Market (ICM) and Voluntary
Carbon Market (VCM).
Timeline: One year
BEE
1) Insurance coverage may be subject to higher premiums in
cases of ELVs, or not having valid fitness certificate.
2) Mandatorily require all Total Loss Vehicles (TLVs) declared by insurers to be transferred to RVSFs.
3)
Uninsured vehicles on roads may face stringent penalties.
Timeline: One y
ear
IRDAI,
MoRTH
1)
Extend Reverse Charge Mechanism (RCM) to ELVs.
2) Revisit the GST rates in ELV sector for reduction.
Timeline: One t
o two years
MoRTH
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 52
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 53
10. Annexure
A. Number of Vehicles coming in for Testing at ATS
Figure 20: Number of Vehicles to be Tested and Total ATS Testing Capacity
The national requirement for vehicle fitness testing at ATS is determined by
separately aggregating the projected volumes of both non-transport and transport
vehicles due for testing in a given compliance year based on VAHAN registration
data, following the norms for fitness testing of vehicles by category as laid down by
MoRTH. For non-transport vehicles, a share of vehicles registered 15 years (lower
share) and 20 years (higher share) prior to the compliance year are considered.
For transport vehicles, a combination of two components is considered: a smaller
share of the fleet aged 9 to 15 years, and a larger share of the fleet aged 2, 4, 6, and
8 years (as per the fitness testing norms for transport vehicles). The percentages
here serve as discount factors to adjust for the loss of vehicles due to ageing,
accidents, informal scrapping, and other attrition factors; and their magnitude
is adjusted as per the age and category of the vehicles to be tested. The total
testing requirement is then obtained by summing the estimated volumes for both
categories.
The number of vehicles that can be tested given current ATS capacity is calculated
using ATS data from the AFMS portal and provided by MoRTH, with the assumption
that each ATS has an annual average testing capacity of 30,000; being a 2-lane
ATS operating 300 days in a year testing 100 vehicles a day.
The total number of vehicles requiring testing is matched against the current and
prospective declared operational ATS capacity to identify a potential capacity gap
in vehicle fitness testing infrastructure.
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 54
B. State-wise ATS Requirement Estimate
Table B1: State-wise estimate of required ATS
S.No. State Name
Estimated
Vehicle
testing
Population
No of
RTOs
Estimated
Requirement
of ATS
Current
no. of
ATS
Gap
Union Territories
1
Andaman &
Nicobar
6742 5 1 0 1
2 Chandigarh 41443 1 1 0 1
3
Dadar & Nagar
Haveli and
Daman & Diu
18052 3 1 1 0
4 Delhi 447055 16 15 1 14
5 Ladakh 3407 3 1 0 1
6 Lakshadweep 608 6 1 0 1
7 Pondicherry 47947 8 2 0 2
States
8 Andhra Pradesh 601720 83 20 18 2
9
Arunachal
Pradesh
14572 29 1 0 1
10 Assam 272005 33 9 5 4
11 Bihar 412735 48 14 8 6
12 Chhattisgarh 278317 31 9 8 1
13 Goa 54298 13 2 0 2
14 Gujarat 963655 37 32 56 0
15 Haryana 570336 98 19 1 18
16
Himachal
Pradesh
90244 96 3 4 0
17
Jammu And
Kashmir
95032 21 3 1 2
18 Jharkhand 262821 25 9 1 8
19 Karnataka 1004329 68 33 3 30
20 Kerala 578855 87 19 4 15
21 Madhya Pradesh 661635 53 22 12 10
22 Maharashtra 1609545 59 54 0 54
23 Manipur 15990 13 1 0 1
24 Meghalaya 30906 15 1 0 1
25 Mizoram 16975 10 1 0 1
26 Nagaland 47755 9 2 0 2
27 Odisha 383692 39 13 1 12
28 Punjab 409394 96 14 0 14
29 Rajasthan 683133 59 23 2 21
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 55
S.No. State Name
Estimated
Vehicle
testing
Population
No of
RTOs
Estimated
Requirement
of ATS
Current
no. of
ATS
Gap
30 Sikkim 7998 9 1 0 1
31 Tamil Nadu 1202190 88 40 0 40
32 Tripura 29450 9 1 0 1
33 Uttar Pradesh 1627332 21 54 11 43
34 Uttarakhand 147448 77 5 7 0
35 West Bengal 476077 59 16 0 16
36 India (Total) 13113694 - 441 156 285
C. Districts in each State covered by ATS
Table C1:State-wise Districts covered by ATS
S. No State
No of
districts
No of districts
not covered by
ATS
No of districts
covered by ATS
1
Andaman And
Nicobar Islands
3 3 0
2 Chandigarh 1 1 0
3
Dadra & Nagar
Haveli
3 1 2
4 Daman & Diu 2 2 0
5 Delhi 11 9 2
6 Ladakh 2 1 1
7 Lakshadweep 1 1 0
8 Puducherry 4 2 2
9 Andhra Pradesh 13 7 6
10 Arunachal Pradesh 25 22 3
11 Assam 34 28 6
12 Bihar 38 32 6
13 Chhattisgarh 33 25 8
14 Goa 2 2 0
15 Gujarat 33 17 16
16 Haryana 22 20 2
17 Himachal Pradesh 12 7 5
18
Jammu And
Kashmir
20 20 0
19 Jharkhand 24 21 3
20 Karnataka 31 26 5
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 56
S. No State
No of
districts
No of districts
not covered by
ATS
No of districts
covered by ATS
21 Kerala 14 8 6
22 Madhya Pradesh 55 48 7
23 Maharashtra 36 33 3
24 Manipur 16 14 2
25 Meghalaya 11 7 4
26 Mizoram 11 11 0
27 Nagaland 17 13 4
28 Odisha 30 29 1
29 Punjab 23 22 1
30 Rajasthan 41 37 4
31 Sikkim 6 6 0
32 Tamil Nadu 38 28 10
33 Telangana 33 29 4
34 Tripura 8 5 3
35 Uttar Pradesh 75 64 11
36 Uttarakhand 13 8 5
37 West Bengal 23 22 1
D. State-wise RVSF Requirement Estimate
Table D1: State-wise estimate of required RVSF
S.No. State Name
Estimated
Vehicle
scrapping
population
Requirement
of RVSF
No. of RVSF Gap
Union Territories
1 Andaman And Nicobar 2464 1 0 1
2 Chandigarh 15307 1 1 0
3
Dadar & Nagar Haveli
and Daman & Diu
6777 1 0 1
4 Delhi 232462 6 1 5
5 Ladakh 758 1 1 0
6 Lakshadweep 369 1 0 1
7 Pondicherry 24164 1 0 1
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 57
S.No. State Name
Estimated
Vehicle
scrapping
population
Requirement
of RVSF
No. of RVSF Gap
States
8 Andhra Pradesh 239560 9 7 2
9 Arunachal Pradesh 2519 1 0 1
10 Assam 40757 3 5 0
11 Bihar 35243 4 5 0
12 Chhattisgarh 75981 4 6 0
13 Goa 19104 1 1 0
14 Gujarat 264431 16 9 7
15 Haryana 203041 11 22 0
16 Himachal Pradesh 31671 3 2 1
17 Jammu And Kashmir 22016 2 0 2
18 Jharkhand 97814 4 0 4
19 Karnataka 503324 18 2 16
20 Kerala 311521 12 0 12
21 Madhya Pradesh 288949 10 7 3
22 Maharashtra 371540 26 9 17
23 Manipur 10430 1 0 1
24 Meghalaya 10868 1 0 1
25 Mizoram 4462 1 0 1
26 Nagaland 11445 3 0 3
27 Odisha 136566 6 2 4
28 Punjab 187383 9 5 4
29 Rajasthan 192639 13 3 10
30 Sikkim 1524 1 0 1
31 Tamil Nadu 461310 23 0 23
32 Tripura 8283 1 0 1
33 Uttar Pradesh 540017 17 82 0
34 Uttarakhand 44348 2 5 0
35 West Bengal 161970 11 2 9
36 India (Total) 4561017 227 178 49
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 58
E. Impact of Suggested EPR Revisions vs. Current EPR Regime
Figure 21: Total RVSF Scrapping Capacity and Steel Recovery from EPR Targets
(Current and Revised)
Figure 21 compares the projected EPR steel targets as per the Environment
Protection (End-of-Life Vehicle) Rules, 2025 (MoEFCC) with the current and
approved RVSF steel processing capacity from 2026 to 2040. It shows both
the original and (proposed) revised EPR targets (see Table 8), highlighting
the significant increases in (proposed) revised targets remain within available
approved RVSF capacity.
The methodology estimates India’s total steel scrapping capacity from operational
and planned RVSFs based on average vehicle weight, steel content, and annual
processing capacity per facility. Using VAHAN data on vehicle registrations, the
total steel content from ELVs is calculated for both transport and non-transport
categories, considering their respective registration ages. The steel recovered under
the current EPR regime is then determined by applying the existing steel recovery
targets set by MoEFCC. Finally, a revised scenario is modelled by increasing these
recovery targets in future years, allowing for a comparative assessment of steel
recovery potential against available RVSF capacity, as reflected in the graph. The
analysis demonstrates that, this increase in EPR targets would be feasible as and
when the total approved RVSF capacity utilisation as per MoRTH data is realized.
F. Price Range of Materials from a Recycled Car
Table F1: Price Range of Materials
S.No. Spare part Average Life
Approximate*
Price range
1 Car tires 4-5 years 500-1000
2 Car battery 2-3 years 500 - 1500
3 Car air filter 19000 km – 25000 km 100-200
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 59
S.No. Spare part Average Life
Approximate*
Price range
4 Synchronizer belt 100000 km to 160000 km 100-300
5
Radiator cooling
system
150000 km 1500-2500
6 Steering wheel oil 3-5 years
7 AC compressor 12-15 years 2000-4000
8 Rubber car wipers 12 months to 24 months 100-300
9 Oil filter
5000 km – 15000 km
depending on the type of oil
100-150
10
Brakes (brake
callipers, wheel
cylinder, and the
master cylinder)
50000 km to 65000 km 1000-2000
11 Spark plugs 30000 km – 50000 km 75 - 100
12
Thermostat Water
Body Elbow
Ten years 500 - 750
13 Alternator 7 years 5000-7000
14 Shocks and struts 100000 km 750 - 1500
15
Starter Starter
Motor Assembly
Parts
100000 km 2000 - 2500
16
Headlights and
taillights
7 to 10 years
17
Windshield wiper
blades
1 to 3 years 150 - 300
18 Clutch Kit Parts 12 to 15 years 1500 - 2000
19 Fuel pump 7 to 10 years 4000-6000
20 Water pump 10 to 12 years 1000 - 1500
21
Engine sensors
Lambda Control
Sensors
10 years and more 1500 - 2000
22 Muffler 10 years and more 2000 - 2500
23 Engine block 15 to 20 years 8000 - 10000
24 Serpentine belt 5 years 100 - 150
25 Camshaft 10 to 15 years 1000 - 1500
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 60
S.No. Spare part Average Life
Approximate*
Price range
26
Piston and
Connecting Rod
Assemblies
8 to 10 years 2000 - 4000
27 Catalytic convertor 15 years 2000 - 6000
28
Starting and
Charging System
10 to 12 years
29
Starter Motor
Assembly Parts
8 to 10 years 1500 - 2500
30 Throttle Body 5 to 8 years 1000 - 1500
31 Intake Manifold 12 to 15 years 1500 - 2000
*Prices are approximated based on a market survey.
G. CoD Concessions Across States
Table G1: CoD Concessions Across States
S. No State
Concession
for Transport
Vehicles
Concession
for Non-
Transport
Vehicles
Notes
1 Himachal Pradesh
15% of
registration
tax
25% of
registration
tax
2 Goa
3 Mizoram
4 Uttarakhand
Uttarakhand: INR 50,000 cap
5 Puducherry
Puducherry: 11,000 cap for 4W
6 Rajasthan
7 Jharkhand
8 Madhya Pradesh
9 Bihar
10 Kerala
Kerala: Offer valid for 1 year after CoD issued
11 Chhattisgarh
12 Punjab
13 Odisha
14 Assam
15 Karnataka
16
Dadra & Nagar Haveli and Daman & Diu
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 61
S. No State
Concession
for Transport
Vehicles
Concession
for Non-
Transport
Vehicles
Notes
17 Maharashtra
10% of
registration
tax
10% of
registration
tax
Scheme expires in
3 years
18 Uttar Pradesh
10% of
registration
tax
15% of
registration
tax
19 Haryana
•
Exempts 10% of tax, OR
• 50% of scrap value, whichever is less
20 Gujarat
•
Transport vehicles: 15%*Vehicle sale price *Multiplying factor as per vehicle type
•
Transport vehicles: 25%* Vehicle sale price *Multiplying factor as per vehicle type
Complex notification
15
E.g. LMV: Sale price of INR 10 lakh or less is multiplied by a factor of 6% and then the MV tax concession percentage depending on vehicle category (Transport/Non- Transport)
15
https://morth.nic.in/sites/default/files/Gujarat_MV%20Tax.pdf
Circular Economy
of End-of-Life Vehicles
(ELVs) in India
Enhancing Circular Economy of End-of-Life Vehicles (ELVs) in India
Copyright @ NITI Aayog
Published: January 2026
NITI AAYOG
National Institute for Transforming India
Government of India
NITI Bhawan, Sansad Marg
New Delhi – 110001
DISCLAIMER
The Energy and Resources Institute (TERI) has received the financial assistance under the
Research Scheme of NITI Aayog (RSNA) to prepare this report. While due care has been
exercised to prepare the report using the data from various sources, NITI Aayog does not
confirm the authenticity of data and accuracy of the methodology to prepare the report
work. NITI Aayog shall not be held responsible for findings or opinions expressed in the
document. This responsibility completely rests with the Institute/Individual Expert, Dr.
Souvik Bhattacharya, Director and Senior Fellow, TERI.
Enhancing
Circular Economy
of End-of-Life Vehicles
(ELVs) in India
Foreword
Foreword
Foreword
Acknowledgements
We thank Shri BVR Subrahmanyam, CEO, NITI Aayog, for his guidance and valuable
suggestions in the preparation of this report. We also thank the members of the Working
Group on Circular Economy of End-of-life Vehicles (ELVs) for their active participation and
constructive inputs. We thank our knowledge partner, The Energy and Resources Institute
(TERI), along with the concerned ministries and all stakeholders for their support in finalising
the report.
Chairperson
Maj Gen K Narayanan, AVSM**, SM
(Retd), Programme Director, Security
and Law, NITI Aayog
Chairperson, Working Group on Circular
Economy of End-of-Life Vehicles (ELVs)
Leadership
Shri Suman K. Bery
Vice Chairperson, NITI Aayog
Shri Rajiv Gauba
Member, NITI Aayog
Shri B.V.R Subhramanyam
CEO, NITI Aayog
Dr. Anshu Bharadwaj
Programme Director, Green Transition,
Climate and Environment (GTC&E)
Division, NITI Aayog
Shri Surender Mehra
Advisor, GTC&E, NITI Aayog
Shri Amit Verma
Former Director, GTC&E, NITI Aayog
(Presently Joint Secretary, Department
of Commerce)
Shri Satyendra Kumar
Former Director, GTC&E, NITI Aayog
Shri Priyavrat Bhati
Programme Lead, GTC&E, NITI Aayog
Authors
NITI Aayog
Shri Amit Verma
Former Director, GTC&E, NITI Aayog
Ms. Prinshila Gandhi
Young Professional, GTC&E, NITI Aayog
Dr. Abhijeet Anand
Consultant, GTC&E, NITI Aayog
Knowledge Partners
Dr Souvik Bhattacharya
Director and Senior Fellow, TERI
Mr. Arya Jash
Research Associate, TERI
Working Group Coordinators
Shri Amit Verma
Former Director, GTC&E, NITI Aayog
Ms. Prinshila Gandhi
Young Professional, GTC&E, NITI Aayog
Working Group Members
Sh. Sudhendu Jyoti Sinha,
Former Adviser (Infra & Connectivity),
NITI Aayog
Shri KC Sharma
Advisor, MoRTH
Shri Ankit Duggar
Director, MoRTH
Shri Harsh Prabhakar
Executive Engineer (Transport), MoRTH
Shri Paresh Kumar Goel
Former Director, MoRTH
Smt. Neha Verma
Former Director, MoSteel
Shri Santosh Kumar
Assistant Director, MoMSME
Shri Ashok Kumar
Deputy Director General, BEE
Shri Saurabh Diddi
Director, BEE
Shri Amrendra Kishore Singh
Deputy Secretary, DHI
Dr. Rashid Hasan
Senior Advisor, SIAM
Mr. Prashant K. Banerjee
Executive Director, SIAM
Mr Prabhakar Tiwari
Co-Chair, Recycling & Material Group.
Mr. Mrityunjay Kumar
Director, RCEICE, FICCI
Dr Praveen Kumar
Programme Head, WRI
Mr. Alok Verma,
Head Corporate Strategy & Head ESG,
Ashok Leyland
Mr. Amitava Roy
Executive Advisor, Maruti Suzuki Toyota
India
Mr. Vinnie Mehta
Director General, Automotive Component
Manufacturers Association of India
(ACMA)
Ms. Seema Babal
Director, Public Policy Regulations,
(ACMA)
Ms. Shikha Tripathi
Deputy Director, ACMA
Mr. Vishal Handa
DGM, Maruti Suzuki India Ltd.
Mr. Pankaj Khera
DGM, Maruti Suzuki India Ltd.
Mr. Rahul Chaudhary
Government Affairs, Maruti Suzuki India
Limited
Mr. Ranjit Singh
EVP, Maruti Suzuki India Ltd.
Mr. Aakaash Singh
DGM, Tata Motors
Mr. Danish Ghazali,
Senior Manager, Tata Motors
Mr. Syed Mohammad Danish,
GM & Head Central Mining, Tata Motors
Mr. Mohammad Danish Ghazali
Deputy GM, Tata Motors
Ms. Lovey Tripathi,
Senior Manager, Tata Motors
Mr. Ashish Bhagra
Chief Operating Officer, Mahindra CERO
Mr. Praveen Bansal
Company Secretary, Maruti Suzuki
Toyotsu India Pvt. Ltd. (MSTI)
Mr. Praveen Gupta
Chief Operations, Mahindra MSTC
Recycling Ltd.
Mr. Gaurav Kaul
H/o Government Relations, MRAI
Mr. Vineel Rajgopal, Valeo
Mr. Sauran Kumar
Lead EV Vehicles, Volvo Eicher
Commercial Vehicles
Mr. Navaneeth Raghu
Lead Sustainability, Mercedes-Benz R&D
Sant Sharan Singh
Group Public Affair, Mahindra
Mr. Kiran Sarkar,
Head Sustainability & Environment,
Mahindra
Mr. Rahul Govindwar
Head Analytics & Business Development,
Mahindra Accelo
Dr Abhinav
Head of Strategy, Attero
Ms. Paromita Chatterjee
Public Policy and Government Affairs,
Attero
Ms. Himanshi Bahl
Policy Specialist, Attero
Mr. Nitin Chitkara
CEO, Meta Materials Circular Market
(MMCM)
Mr. Yashodhan Rametke
Former Vice President, MMCM
Mr. Kartick Nagpal
President, Rosemarta, MRAI
Mr. Jagdish Prasad
Executive Member, MRAI
Mr. Pramod Shinde
Head, Communication, MRAI
Mr. Chandresh, Bosch
Mr. Karthik Sarma, Cummins
Dr. Shrutika, Subros
Mr. Yash Arora
Pineview Technology Private Limited,
RVSF
Mr. Brijesh Singh
Rosmerta Recycling, RVSF
Mr. Lawrence Pinto
Orissa Steelmetaliks Pvt Ltd, RVSF
Mr. Surjeet Singh Verma
Mahindra MSTC Recycling Pvt Ltd, RVSF
Mr. Mariah Shankar
Suhas Automotive Private Limited, RVSF
Mr. Praveen Sadhuram Goyal
Bhagyalaxmi Rolling Mill Pvt Ltd, RVSF
Mr. Virendra Deep Singh
Global Ultra Tech, RVSF
Mr. Anand Deshpande
Mahindra MSTC Recycling Pvt Ltd, RVSF
Mr. Nitesh Modi
Shree Ambica Automotive Pvt Ltd, RVSF
Mr. Shrenik Viren Diwanji
Shuchaye Recyclers Private Limited,
RVSF
Mr. Virender Dahiya
Serve Uttam Ventures Private Limited,
RVSF
Mr. Ashish Dhingra
CMR Kataria Recycling Pvt. Ltd, Gujrat
RVSF
Collaborators
Sh. V Umashankar
Secretary, MoRTH
Shri Tanmay Kumar
Secretary, MoEFCC
Shri Neelesh Kumar Sah
Joint Secretary, MoEF&CC
Research & Networking (R&N) Team
Ms. Anna Roy
Programme Director, R&N, NITI Aayog
Ms. Banusri Velpandian
Senior Specialist, R&N, NITI Aayog
Design Team
Ms. Keerti Tiwari,
Director, Communication, NITI Aayog
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 11
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA List of Figures.................................................................................................................................ii
List of Abbreviations....................................................................................................................iii
Executive Summary......................................................................................................................iv
1. Introduction..............................................................................................................................01
2. End-of-Life Vehicle Management in India........................................................................05
2.1 Definition of ELV in India
................................................................................................05
2.2 Risks and Challenges of Inf
ormal Recycling
............................................................. 05
2.3 Consumer Journey of Vehicle Scrapping in India....................................................07
2.3.
1 Awareness
................................................................................................................07
2.3.2 R
esearch
..................................................................................................................07
2.3.3 E
valuation
...............................................................................................................08
2.3.4 Decision..................................................................................................................08
3. R
egulatory Landscape for End-of-Life Vehicles
............................................................09
3.1 Rules notified b
y MoRTH for ELV Management
.......................................................09
3.2 Norms f
or Fitness Testing of Transport and Non-Transport Vehicles
..................13
3.3 Guidelines on Pr
ovisions for End of Life Vehicles, June 2021 (AIS-129)
.............13
3.4 Guidelines for Environmentally Sound Facilities for Handling and
Scrapping of End-of- Life Vehicles by CPCB..............................................................13
3.5 Environment Protection (End-of-Life Vehicles) Rules, 2025,
Ministry of Environment, Forest and Climate Change (MoEFCC)..........................14
3.6 Scheme for Special Assistance to States for Capital Investment
(SASCI), Ministry of Finance...........................................................................................14
4. Required ATS’s for ELV Management................................................................................20
4.1 Ov
erview of Current Automated Testing Stations (ATS) Infrastructure
.............20
4.2 Geogr
aphical Distribution and Growth of ATS
.........................................................20
4.3 A
TS Infrastructure Requirement Analysis
..................................................................22
4.4 Unders
tanding various models towards establishment of ATS
...........................23
4.4.
1 Privately owned and operated enterprise
........................................................23
4.4.2 Setup b
y State, operations outsourced to a private vendor
......................23
4.4.3 Priv
ately set up, the state selects concessionaire through bidding
.........23
4.4.4 Set up and oper
ated through a Public-Private-Partnership model
..........23
4.5 K
ey Challenges and Proposed Solutions
...................................................................24
4.5.
1 Limited Adoption of Infrastructure Across the Country
...............................24
Table of Contents
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA i
4.5.2 Regional Imbalance in Existing Infrastructure...............................................24
4.5.3 Illegal Issuanc
e of Fitness Certificates
.............................................................24
5. Infr
astructure Requirements and Other Aspects of RVSFs
..........................................26
5.
1 Overview of Current Registered Vehicle Scrapping Facilities (RVSF)
Infrastructure
.....................................................................................................................26
5.2 Geogr
aphical Distribution and Infrastructure Growth of RVSFs
..........................26
5.2.
1 Geographical Distribution and Setup
................................................................26
5.2.2 R
VSF Infrastructure Requirement
......................................................................28
5.3 Ov
erview of Informal Vehicle Scrapping in India
....................................................29
5.4 Pric
e Differential and Different Approaches to Bridge the Gap
..........................30
5.4.
1 Price Differential - RVSF Perspective
.................................................................31
5.4.
1.1 Sale of spare parts by RVSF
.........................................................................32
5.4.
1.2 Sale of EPR Certificates
................................................................................33
5.4.2 Benefits A
ccrued to Consumers
........................................................................34
5.4.2.
1 Certificate of Deposit (CoD)
........................................................................35
5.4.2.2 Sho
wroom Discount from Automobile OEMs........................................36
5.5 Key Challenges and Proposed Solutions
...................................................................36
5.5.
1 Limited Adoption of Infrastructure Across the Country
...............................36
5.5.2 R
egional Imbalance in Existing Infrastructure
................................................37
5.5.3 R
egistration and compliance process for RVSF
.............................................37
5.5.4 Limit
ed ELV Feedstock Reaching RVSFs
.........................................................37
5.5.5 Int
ense Competition from Informal Sector Operators
.................................37
6. Simplifying V
ehicle-Owner Related Procedural Issues
................................................40
6.1 De-r
egistration process of ELV from VAHAN database
.........................................40
6.2 Enhancing the V
AHAN portal
......................................................................................40
7
. Strengthening Consumer Awareness on Recycling Ecosystem
..................................44
7.
1 Lack of Consumer Awareness
.......................................................................................44
7
.2 Communication strategy
...............................................................................................44
8. Other Int
erventions
................................................................................................................46
8.
1 Carbon Credits
..................................................................................................................46
8.2 V
ehicle Insurance as a Lever
.........................................................................................46
8.3 GS
T
......................................................................................................................................46
9. Conclusion - Summary of Recommendations.................................................................48
10. Anne
xure
................................................................................................................................. 53
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA ii
List of Figures
Figure No.Description Page
1 Projected ELV stock in India 01
2 Steel recovery from vehicles 03
3 Informal disposal of an ELV 06
4 Consumer Journey of ELV Disposal 07
5 Certificate of Deposit issued by RVSF 12
6 Infrastructure in an ATS 20
7 Geographical Distribution of ATS as on 01.09.25 21
8 ATS setup in each FY 21
9 ATS Infrastructure Gap 22
10 State-wise ATS Revenue 24
11 Infrastructure in an RVSF setup 26
12 Geographical Distribution of RVSFs as on 01.09.25 27
13 RVSF set up in each FY 27
14 Break-even point for an RVSF 28
15 Current Route for Vehicle Scrapping 30
16 RVSF-Informal Scrapper Price Differential 31
17 Benefits Accrued to Consumer 34
18
Unfit Vehicle Dashboard (Visible to RVSF owners and
State Administration on V-Scrap Portal)
41
19 Aadhar-based Vehicle Ownership Transfer 43
20
Number of Vehicles to be Tested and Total ATS Testing
Capacity
53
21
Total RVSF Scrapping Capacity and Steel Recovery
from EPR Targets
58
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA iii
List of Abbreviations
Abbreviation Description
ACMA Automotive Component Manufacturers Association of India
ATS Automated Testing Station
BEE Bureau of Energy Efficiency
BS Bharat Stage
CoD Certificate of Deposit
CVS Certificate of Vehicle Scrapping
CPCB Central Pollution Control Board
ELV End-of-Life Vehicle
EPR Extended Producer Responsibility
IRDAI Insurance Regulatory and Development Authority of India
MoEFCC Ministry of Environment, Forests and Climate Change
MoF Ministry of Finance
MHI Ministry of Heavy Industries
MoMSME Ministry of Micro, Small and Medium Enterprises
MoRTH Ministry of Road Transport and Highways
OEM Original Equipment Manufacturers
RVSF Registered Vehicle Scrapping Facility
SIAM Society of Indian Automobile Manufacturers
SPCB State Pollution Control Board
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA iv
Executive Summary
India’s transition towards sustainable development requires a strategic focus on resource
efficiency, environmental protection, and circular-economy practices across key sectors. One
of the critical areas within this broader agenda is the responsible management of material-
intensive products at the end of their lifecycle. As the country continues to witness rapid
urbanisation and an expanding vehicular population, the need for structured interventions in
the transportation and mobility sector becomes increasingly evident.
In this context, the management of End-of-Life Vehicles (ELVs) has emerged as a policy
priority, requiring coordinated action to address environmental, economic, and logistical
challenges. The growing volume of ELVs on Indian roads calls for the creation of a formalised,
sustainable, and economically viable scrapping ecosystem. In recent years, several regulatory
measures have been introduced at the central level, including the enforcement of fitness
testing mandates, standardised scrapping protocols, and Extended Producer Responsibility
(EPR) obligations, to promote responsible vehicle disposal.
Through extensive consultations with stakeholders and in-depth analysis of operational
realities, four core challenges have been identified that hinder the development of a well-
functioning ELV circular economy. These include the limited rollout of Automated Testing
Stations (ATS) and Registered Vehicle Scrapping Facilities (RVSFs) infrastructure across
states; weak financial viability of RVSFs; procedural bottlenecks in scrapping and de-
registration processes; and insufficient consumer awareness.
In response, a range of policy recommendations have been proposed. India’s vehicle
scrappage ecosystem to be strengthened through a coordinated approach that focuses on
rapid infrastructure rollout, sector formalization, procedural simplification, and enhanced
circular-economy outcomes. ATS and RVSFs to be established on a time-bound basis.
PSU-led models with private operations may be explored to ensure broader geographic
coverage. Formalization of the informal scrappage sector to be undertaken in a phased
manner, supported through platforms such as Udyam Assist and technical assistance under
SASCI. A one-time waiver of legacy environmental liabilities may be considered to encourage
compliance by small dismantlers. To enhance financial viability and material recovery, the
spare parts trade linked to ELVs should be formalized, EPR norms strengthened through
higher mandated recovery rates, and uniform Certificate of Deposit (CoD) concessions
adopted across States and UTs. Transparency in value realization to be improved by
upgrading the V-Scrap portal with a robust scrap price discovery mechanism.
Procedural reforms to ensure that vehicle de-registration occurs only upon submission
of a valid CoD, supported by Aadhaar-based ownership transfer and automated penalty
accrual. These reforms to be complemented by a continued public awareness, including
targeted outreach campaigns, VAHAN-based alerts to vehicle owners nearing ELV status,
and clear dissemination of authorized ATS and RVSF information on government portals.
Collectively, these measures will improve compliance, environmental outcomes, and ease
of participation for stakeholders, ensuring effective implementation of the National Vehicle
Scrappage Policy.
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 1
1. Introduction
India’s ongoing industrial development and rapid pace of urbanization have given rise
to growing concerns around sustainable waste management and responsible resource
utilization. As one of the fastest-growing economies, India is currently positioned as
the third-largest automobile market in the world
1
, witnessing the addition of over 20
million vehicles to its road network every year. This increasing vehicle population
directly contributes to the growing volume of End-of-Life Vehicles (ELVs) across the
country. As per estimates
2
, India had approximately 10 million ELVs in circulation in
2020. The cumulative number of ELVs is expected to increase to nearly 23 million by
the end of 2025 and is projected to reach close to 50 million by 2030, underscoring
the urgent need for a robust policy and regulatory framework for the sustainable
management of ELVs (Figure 1).
Number of cumulative ELVs in India (in million)
Figure 1: Projected ELV stock in India
The growing volume of ELVs poses multidimensional challenges regarding road safety and serious environmental concerns while both using and scrapping them. The old and unfit vehicles raise road safety issues, as they become increasingly difficult to operate and control and therefore must be declared end of life based on robust testing. Emissions from older vehicles are significantly more polluting, up to eight times more in the case of BS-I vehicle as compared to BS-VI emission standard vehicle and therefore there is a strong case to replace them with less polluting BS-VI or electric vehicles (EV) (Box 1.1)
3
.
1
SIAM (2024) Annual Report 2023-24 https://www.siam.in/uploads/filemanager/SIAMAnnualReport2023-24.pdf
2
SIAM (2023) Context Paper: ELV Recycling - Status of Circular Economy in India https://www.siam.in/
uploads/filemanager/377ChakriytaContextPaper.pdf
3
Sources – 1) CPCB (2017) Vehicular Exhaust, https://cpcb.nic.in/vehicular-exhaust/
2) Spinny (2025) Bharat Stage Emission Norms: BS-I, BS-II, BS-III, BS-IV, BS-VI Explained https://www.
spinny.com/blog/bharat-stage-emission-norms-bs-i-bs-ii-bs-iii-bs-iv-bs-vi-explained/
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 2
Box 1.1 – Bharat Stage Emission Standards (BSES)
India’s Bharat Stage emission standards are a set of progressively stringent
vehicular emission regulations implemented by the Ministry of Road Transport and
Highways (MoRTH) and enforced by the Central Pollution Control Board (CPCB).
These standards regulate the permissible limits of air pollutants such as nitrogen
oxides (NO
x
), carbon monoxide (CO), hydrocarbons (HC), and particulate matter
(PM) emitted by internal combustion engine vehicles.
Table 1: Comparison of various BS norms
Source: CPCB, Spinny
The transition from BS-IV to BS-VI norms (skipping BS-V), implemented nationwide from April 1, 2020, represented a critical leap in India’s commitment to reducing vehicular emissions. BS-VI standards introduced advanced after-treatment technologies such as diesel particulate filters (DPF), selective catalytic reduction (SCR), and onboard diagnostic systems, along with a significant reduction in sulphur content in fuels.
Importantly, while pre-BS VI vehicles may appear to be visually well-maintained
and emit little visible smoke, empirical evidence indicates that their actual
pollutant load per kilometre is substantially higher compared to BS-VI compliant
vehicles.
However, the environmental challenges of scrapping an ELV are also significant
due to lack of formal vehicle scrapping facilities which have all the environmental
safeguards.
The economic potential of ELV processing is also important as ELVs hold
considerable value as a resource. It is estimated that around 98 million tonnes of
steel is likely to be recovered from vehicles manufactured between 2005 and 2023,
which may serve as a major source of secondary steel for the country (Figure 2),
saving 43 million metric tonnes of CO2 equivalent.
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 3
Figure 2: Steel recovery from vehicles
Ministry of Road Transport and Highways (MoRTH) has led the initiatives in this
regard by starting the Voluntary Vehicle-Fleet Modernisation Program in 2021. The
ministry has worked to create a scientific basis to test the fitness of the vehicles
through Automated Testing Stations (ATS) rather than just the years of usage. Once
a vehicle reaches end of life, MoRTH has also enabled creation of Registered Vehicle
Scrapping Facilities (RVSF) to dispose the ELV in an environmentally sound manner
while also recovering the maximum possible economic value from it.
Despite the efforts in the right direction, the current ELV scrapping landscape
in India continues to face several challenges in developing a well-functioning
scrapping ecosystem. Key issues include limited availability of ATS, non-existent
and underutilized RVSFs, complex procedural requirements for deregistration and
low public awareness.
These challenges are further aggravated by the widespread presence of an
unregulated informal scrapping sector, which operates at lower costs and offers
attractive bids to vehicle owners seeking to dispose their ELV.
This report outlines the major bottlenecks in the existing scrapping system and
provides actionable recommendations aimed at strengthening the ELV value chain,
promoting environmentally sound practices, and advancing the circular economy
framework for vehicles in the country.
Million Tonnes of Steel
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 5
2. End-of Life Vehicle Management in India
2.1 Definition of ELV in India
End-of-Life Vehicles refer to vehicles that are no longer deemed roadworthy or
legally eligible for use under applicable regulatory provisions. As per the Motor
Vehicles (Registration and Functions of Vehicle Scrapping Facility) Rules, 2021, such
vehicles include:
2.1.1
Those that are no longer validly registered;
2.1.2 Have been declared unfit by an authorised Automated Fitness Centre or Road
Transport Officer;
2.1.3 Have had their registration cancelled either under Chapter IV (“Registration of
Motor Vehicles”) of the Motor Vehicles Act, 1988 or through an order issued by
a competent Court of Law;
2.1.4
Additionally, vehicles that are voluntarily declared as waste by their legitimate registered owner, owing to reasons specified in the rules.
Further, according to orders dated 26.11.2014 and 07.04.2015 passed by the Honourable National Green Tribunal and upheld by an order of the Honourable Supreme Court of India dated 29.10.2018, petrol vehicles over 15 years old and diesel vehicles over
10 years old are not allowed to ply on the roads of the National Capital
Region of Delhi. These judicial orders are enforced by the Government of the National Capital Territory of Delhi (GNCTD) and Commission for Air Quality Management (CAQM). As on August 2025, the above orders are under judicial review by the Honourable Supreme Court itself after the Government of Delhi approached the court for a fitness-based criteria rather than an age-based criteria to declare an ELV.
2.2 Risks and Challenges of Informal Recycling
When a vehicle reaches the end of its useful life from the consumer’s perspective, it becomes essential to ensure its responsible disposal in an environmentally sound manner. Informal scrapping may have adverse environmental effects as described in Box 2.1.1. Further the benefits of the formal environmentally sound vehicle scrapping are provided in Box 2.1.2.
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 6
Box 2.1.1 – Environmental and Safety
Risks of Informal ELV Scrapping
• Release of hazardous fluids such as
fuel, coolant, and brake oil into soil
and water systems.
• Uncontrolled disposal of
batteries, resulting in heavy metal contamination.
•
Improper dismantling of airbags and refrigerants, leading
to emission of
toxic gases like CFCs.
• Fire and explosion risks due to crude processing or storage of fuel residues.
•
Unsafe working conditions for laborers; exposure to toxic substances.
•
Illegal dumping of automobile shredder residue (ASR), including plastics, foams,
and glass, into
landfills.
Box 2.1.2 - Benefits of Formal,
Environmentally Sound Vehicle
Scrapping
•
Proper handling and safe disposal of
all hazardous components and fluids.
• High recovery rates of valuable materials—steel, non-ferrous metals, plastics—through scientific recycling.
•
Reduction of soil, air, and water pollution through compliance with environmental regulations.
•
Traceability and documentation through Certificates
of Deposit
(CoD), supporting legal compliance and incentives.
•
Creation of formal sector employment and improved workplace safety.
•
Contribution to national resource efficiency and
circular economy
targets.
The process flow of scrapping an ELV is illustrated in Figure 3. It involves multiple steps with specific challenges under the existing regulatory and operational ecosystem.
Figure 3: Informal disposal of an ELV
(Source: SIAM (2023) Context Paper: ELV Recycling - Status of Circular Economy in India)
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 7
2.3 Consumer Journey of Vehicle Scrapping in India
The consumer journey related to vehicle scrapping typically progresses through
several key stages, including awareness, information seeking, evaluation of options,
and ultimately, decision-making. Each stage plays a critical role in shaping the
consumer’s approach to the sustainable disposal of end-of-life vehicles. This is
summarised in Figure 4.
Figure 4: Consumer Journey of ELV Disposal
2.3.1 Awareness
The first step in the vehicle scrapping process is awareness about the scrapping
ecosystem. At this stage, consumers need to be informed about available options
for lawful disposal of their ELVs. In most cases, consumers either rely on internet
searches or consult friends and family who have previously scrapped a vehicle, or
local car repair shops. However, visibility of formal scrapping facilities, particularly
Registered Vehicle Scrapping Facilities (RVSFs), is limited online. As a result, reliable
information regarding formal options is not easily accessible to the consumer.
2.3.2 Research
To search for ELV disposal options, a user may browse vehicle resale platforms
such as True Value, Spinny, Cars24, CarDekho, OLX etc., or visit the websites of
authorised RVSFs like Tata ReWire, Mahindra CERO, Maruti Suzuki Toyotsu India
Pvt Ltd, etc. Alternatively, some consumers may approach local informal vehicle
scrappers. The research stage is often marked by the presence of misinformation
about price and lack of clarity of process, which tends to divert consumers towards
unregulated and informal channels.
Informal: No Certificate of Deposit/ Certificate of
Vehicle Scrapping
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 8
2.3.3 Evaluation
In this phase, consumers assess the trade-offs between formal and informal scrapping
options. The decision is often influenced by financial and operational considerations.
For instance, informal scrappers tend to offer a higher price—ranging between
₹15,000 to ₹20,000 more for a mid-range vehicle such as the Suzuki Swift Dzire—
compared to formal entities. Additionally, the service lead time at RVSFs may be
longer by 4-14 days, further discouraging consumers. However, unlike authorized
scrapping facilities, informal scrappers do not issue vital documents like the
Certificate of Deposit (CoD), effectively excluding vehicle owners from government
incentives and hindering de-registration.
2.3.4 Decision
Based on the insights gained from the earlier stages, consumers make a final choice
between formal RVSFs and informal scrapping dealers. This decision is often driven
by price considerations and convenience of service.
This consumer journey highlights the need for targeted awareness initiatives to
educate citizens about the environmental, legal, and long-term benefits of formal
scrapping. Despite the structured and compliant process offered by RVSFs,
consumers often opt for informal channels due to better immediate financial returns,
and faster and hassle-free service. Addressing these behavioural and informational
gaps is essential to enhance the uptake of formal vehicle scrapping systems.
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 9
3. Regulatory Landscape for End-of-Life Vehicles
3.1 Rules notified by MoRTH for ELV Management
The regulatory framework governing ELVs in India is primarily shaped by a set of key
rules and notifications issued by Ministry of Road Transport and Highways (MoRTH)
and Ministry of Environment, Forests and Climate Change (MoEFCC). These rules
define the procedures, standards, and responsibilities across the ELV ecosystem —
from vehicle fitness testing and scrapping operations to environmental compliance
and producer responsibility.
A summary of rules notified by the MoRTH, the nodal ministry for vehicle scrapping,
since announcing the Voluntary Vehicle Modernisation Program (V-VMP) are listed
below.
Table 2: List of various rules notified by MoRTH on vehicle scrapping
Title
Gazette
Notification
Brief Description
Motor Vehicles (Registration and Functions of Vehicle Scrapping Facility) Rules,
2021
Motor Vehicles
(Registration
and Functions of
Vehicle Scrapping
Facility) Rules,
2021
GSR 653(E);
23 Sep 2021
• Defines RVSF and outlines powers, duties,
and eligibility conditions.
• Specifies procedure for registration, validity,
and renewal for RVSF.
• Covers scrapping procedure, issuance of
CoD & CVS, and requirements for scrapping
yard and collection centre.
• Mandates audits, certifications, and
digital record maintenance, and provides
mechanism for appeal.
Amendment
Rules, 2022
GSR 695(E); 13
Sep 2022 • RVSF registration validity increased to
15 years, with renewals every 10 years
thereafter.
• CoD now valid for 2 years to claim incentives
on new vehicle purchases.
• Land lease allowed in place of ownership;
new self-declaration requirements for safety
and environmental compliance.
• Application processing capped at 60 days;
revised CoD format introduced.
Amendment
Rules, 2024
GSR 212(E);
15 Mar 2024 • The entity shall obtain Consent to Establish
from the SPCB for setting up RVSF.
• CoD shall be electronically tradeable with
no incentives for government or impounded
vehicles.
• Authorisation validity is extended from two
to three years.
• RVSF shall ensure audits for compliance and
mass flow tracking.
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 10
Title
Gazette
Notification
Brief Description
(Twenty First
Amendment)
Rules, 2021
[Chapter XI –
Recognition,
Regulation
and Control
of Automated
Testing Stations]
GSR 652(E);
23 Sep 2021 • Lays down the guidelines for recognition
and regulation of Automated Testing
Stations (ATS).
• Specify use of automated equipment for
conducting fitness tests of vehicles.
• Specify issuance of Certificates of Fitness.
• Eligibility and infrastructure required to set
up ATS.
(Twenty Third
Amendment)
Rules, 2021
GSR 714 (E);
04 Oct 2021 • Provides for waiver of fee for issue of
certificate of registration submission of
CoD.
• Revision of fee for renewal of registration,
fitness test and certificate
.
(Twenty Fourth
Amendment)
Rules, 2021
GSR 720(E);
05 Oct 2021
• Provides for concession in the motor vehicle
tax:
x
upto 25%, in case of non-transport vehicles.
xupto 15%, in case of transport vehicles.
• for a vehicle registered against submission
of CoD.
(Eighth
Amendment)
Rules, 2022
GSR 272(E);
05 Apr 2022 • Provides for mandatory fitness of motor
vehicles only through ATS as under –
xFor Heavy Goods Vehicles/Heavy
Passenger Motor Vehicles with effect from
01 Apr 2023 onwards.
xFor Medium Goods Vehicles/Medium
Passenger Motor Vehicles and Light Motor
Vehicles (Transport) with effect from 01
Jun 2024 onwards.
(Seventeenth
Amendment)
Rules, 2022
GSR 797(E); 31
Oct 2022 • Provides for a single-window electronic
portal for ATS registration applications,
uploads, and payments.
• Establishes 10-year validity and renewal
period for registration certificates.
• Mandates six-monthly inspection and
calibration of ATS with reporting on the
government portal.
• Vehicle failing mandatory parameters shall
be declared Unfit, with provision for re-test
within 30 days.
• If the vehicle fails critical tests again or is
not re-tested within the prescribed period,
it shall be declared as ELV.
(First
Amendment)
Rules, 2023
GSR 29(E);
16 Jan 2023 • Provides that Registration Certificate for
government-owned vehicles shall not be
renewed after the lapse of fifteen years.
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 11
Title
Gazette
Notification
Brief Description
(Fifth
Amendment)
Rules, 2023
GSR 663(E); 12
Sep 2023 • Prescribes fitness validity as two years for
transport vehicles up to eight years old, and
one year for vehicles older than eight years.
• Mandates that fitness of heavy, medium,
and light motor vehicles shall be conducted
exclusively through ATS effective from 01
Oct 2024.
• Where ATSs are operational within a
registering authority’s jurisdiction, fitness
of all transport vehicles shall be carried out
only through them.
(Seventh
Amendment)
Rules, 2024
GSR 195(E); 14
Mar 2024 • A vehicle which fails to undergo fitness test
within 180 days from the due date or expiry
of certificate of fitness shall be declared as
ELV.
• The declaration shall be recorded in
the VAHAN database by the respective
registering authority.
• The declaration shall not be applicable to
specialized and exempted vehicle categories
as notified by the Central Government.
(First
Amendment)
Rules, 2025
GSR 200(E);
26 Mar 2025 • 50% concession on MV tax, against CoD for:
xAll transport and non-transport vehicles
which are manufactured as per BS-I norms
and earlier Mass Emission Standard norms.
xAll medium and heavy goods and
passenger motor vehicles which are
manufactured as per BS-II norms.
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 12
Box 3.1 Certificate of Deposit
Figure 5: Certificate of Deposit issued by RVSF
(Source: VAHAN V-Scrap Portal User Manual)
The Certificate of Deposit (CoD) is the certificate issued by the RVSF to recognise
the transfer of ownership of the vehicle from the registered owner to the Registered
Scrapper for further treatment as per the Motor Vehicles (Registration and Functions
of Vehicle Scrapping Facility) Rules, 2021 issued by MoRTH. The CoD is a necessary
and sufficient document for the owner to avail incentives and benefits for purchase
of a new vehicle.
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 13
MoRTH has also launched a Government e-Marketplace (GeM) e-auction portal
recently for auction of Govt. vehicles for scrapping at RVSFs where so far 35,000
vehicles (as per MoRTH data from 01.04.2025 to 30.09.2025) have been auctioned
for scrapping by Central Government departments and ministries.
3.2 Norms for Fitness Testing of Transport and Non-Transport Vehicles
The government provisions related to fitness testing, as prescribed under the
guidelines issued by MoRTH, for various categories of vehicles are outlined in Table
3 below. MoRTH has notified 01 Apr 2025 to be the cut-off date for mandatory
testing of transport vehicles at ATSs.
Table 3: Norms for Fitness Testing of Transport and Non-Transport Vehicles
(Source: MoRTH)
Vehicle Category Testing Frequency
Transport vehicles Undergo fitness test every 2 years for first 8 years
and annually thereafter
Non-Transport vehicles Valid fitness certificate is necessary for renewal of
registration after 15 years. Renewal is valid for every
5 years
Furthermore, under the Central Motor Vehicles (Fifth Amendment) Rules, 2023, it
is mandatory for transport vehicles to undergo fitness testing exclusively through
Automated Testing Stations (ATS) where such facilities are available within the
jurisdiction of the registering authority. Consequently, mandatory access to Regional
Transport Offices (RTOs) for fitness testing has been revoked in districts where
ATSs are operational—covering 101 RTOs across 87 districts in 14 States and Union
Territories.
3.3 Guidelines on Provisions for End of Life Vehicles, June 2021 (AIS-129)
These standards, developed by the Automotive Industry Standards Committee
under MoRTH, provides the regulatory and procedural framework for establishing
and operating Registered Vehicle Scrapping Facilities (RVSFs). It applies to all
vehicle categories and clearly defines the roles of owners, scrappers, and authorities.
The standard outlines eligibility criteria, registration and documentation
requirements, and mandates environmentally sound practices for scrapping ELVs.
It details the full scrapping process—from depollution and dismantling to disposal—
while prescribing technical and environmental infrastructure, including hazardous
waste management, drainage, and de-risking equipment. AIS-129 prohibits reuse
of critical safety and emission components, ensures compliance through CPCB
guidelines, and mandates third-party audits and reporting for safe, transparent, and
accountable ELV processing.
3.4
Guidelines for Environmentally Sound Facilities for Handling and
Scrapping of End-of- Life Vehicles by CPCB
To support India’s transition to a circular economy and ensure sustainable ELV management, the CPCB issued revised guidelines in March 2023 (earlier guidelines having been published in 2016 and 2019) for the environmentally sound handling,
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 14
dismantling, depollution, and recycling of ELVs. These guidelines align with the
Motor Vehicles (Registration and Functions of Vehicle Scrapping Facility) Rules,
2021, and harmonise with the Steel Scrap Recycling Policy and AIS-129 standards.
The document outlines detailed procedural, environmental, and infrastructural
requirements for setting up and operating RVSFs, with emphasis on regulatory
compliance, safe handling of hazardous materials, and traceable processing of scrap
through formal channels.
The guidelines adopt a step-by-step approach, covering ELV collection, depollution,
dismantling, shredding, waste segregation, and final disposal. It highlights the
importance of controlling pollution from hazardous substances such as oils,
coolants, batteries, airbags, refrigerants, and ASR (Automobile Shredder Residue),
and mandates their management under various Waste Management Rules under
the Environment (Protection) Act, 1986. Furthermore, the guidelines call for robust
environmental, health, and safety (EHS) protocols, infrastructure standards for
facilities, and mechanisms for traceability through digital platforms.
3.5
Environment Protection (End-of-Life Vehicles) Rules, 2025, Ministry of
En
vironment, Forest and Climate Change (MoEFCC)
Environment Protection (End-of-Life Vehicles) Rules introduce Extended Producer
Responsibility (EPR) obligations for the automobile sector. These obligations are
defined across different categories of vehicles, for different compliance periods as
based on their average life — 15 years for transport vehicles and 20 years for non-
transport vehicles. The EPR targets (Table 4) are linked to the proportion of steel
content used in the manufacturing of new vehicles for a particular compliance period.
Table 4: EPR Target as per Environment Protection (End-of-Life Vehicles) Rules, 2025
Compliance Period EPR Target (% of steel used)
2025-2030 8%
2030-2035 13%
2035-2040 (and 2040 onwards) 18%
For instance, the EPR target set for the year 2025-2026 would require the purchase of EPR certificates for a minimum of 8% steel used in vehicles manufactured in 2005- 2006 (Non-Transport) or 2010-2011 (Transport).
3.6
Scheme for Special Assistance to States for Capital Investment (SASCI),
Ministry of Finance
This assistance provided under the SASCI is aimed at increasing the pace of V-VMP implementation (Box 3.2). Incentives worth Rs 2,000 crore was extended to State Governments (on achieving V-VMP milestones in January-March 2023) under Department of Expenditure’s (DoE) Scheme for Special Assistance to States for Capital Expenditure for 2022- 23. This was extended for the period of 2023-24 and further for the period of 2024-25 under the revamped Scheme for Special Assistance to States for Capital Investment (SASCI). Seeing the relative success in adoption of vehicle testing and scrapping infrastructure in multiple states, DoE has further decided to continue this scheme for FY 26.
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 15
Box 3.2 Voluntary Vehicle Modernisation Program (VVMP)
Launched in August 2021 by MoRTH, the Voluntary Vehicle Fleet Modernisation
Programme (VVMP) aims to phase out unfit and polluting vehicles through a
structured ecosystem of ATS and RVSFs. Under the policy, private vehicles older
than 20 years and commercial vehicles over 15 years must undergo mandatory
automated fitness testing; failure to meet standards results in de-registration and
scrapping at authorized facilities. To incentivize voluntary scrapping, the policy
offers a composite incentive package: scrap value, automaker discounts; waiver
of registration fees; and state-level motor vehicle tax rebates (up to 25% for non-
transport vehicles and 15% for transport vehicles). The program is designed to foster
India’s transition to circular economy-based automotive recycling.
The SASCI, as approved by the DoE, disburses funds to state governments to
incentivise scrapping of State Government vehicles which are older than 15 years; and
to financially support waiver of liabilities on old vehicles, providing tax concessions
to individuals for scrapping of old vehicles and setting up of ATS. The funds released
under SASCI to various states are listed in Table 5.
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 16
Table 5:State-wise Fund Disbursement by DoE for SASCI
State
Funds as approved by DoE (in INR Cr.)
January 2023 – March
2023 (Scheme for
Special Assistance for
Capital Expenditure
2022-23)
April 2023 – March
2024 (SASCI 2023-
24)
April 2024
– March
2025 (SASCI
2024-25)
Andhra Pradesh - 11.50
The Budget
release
details
are yet to
be made
available.
Assam 12.6 52.40
Bihar - 60.7
Chhattisgarh - 68.6
Goa - 3.5
Gujarat - 152.5
Haryana - 50
Himachal
Pradesh
- 25
Jharkhand - 6.7
Karnataka - 116.82
Kerala - 80.4
Madhya Pradesh 75 25
Maharashtra 38.5 32.3
Mizoram - 3.5
Odisha 75 13.5
Punjab - 62.6
Rajasthan - 70.8
Uttarakhand - 33.3
Uttar Pradesh 150 71.1
Total 351 940 841
Source: MoRTH (2024) Annual Report 2023-24 and MoRTH data shared as on 11.06.2025
Government of India also modified the General Financial Rules (GFR) to mandatorily
scrap Government vehicles older than 15 years and only to be sent to formal
scrapping centres.
The details of the subsidy amount provided to states under the scheme for setting
up ATS for the FY 2024-25 are presented in the Table 6 below:
Table 6: Current Subsidy for ATS setup given in Scheme for Special Assistance to
States for Capital Investment (As per data from MoRTH provided in September 2024)
Region District Category Subsidy per ATS (in INR Cr.)
All States (Except
North-Eastern States)
Regular 3
Priority 3.6
North-Eastern States
Regular 4.5
Priority 5.4
250 priority districts identified based on fitness testing load
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 17
Box 3.3 Understanding global good practices linked to ELV
management
Table 7: Global good practices around legislation linked to ELV management
Country Legislation Mechanism Key Learnings
India
Motor Vehicles
(Registration and
Functions of Vehicle
Scrapping Facility)
Rules (2021)
Consumer - No mandatory fee at
purchase or disposal. Pays nothing
to scrap formally.
OEM – Bears certain portion of the
cost and needs to meet targets
under the newly-introduced EPR.
Recycler - RVSFs must invest in
compliant infrastructure but suffer
from low ELV inflow and poor
margins.
•
Economic viability is necessary for a successful RVSF setup.
•
Sale of spare parts form a significant portion of informal recyclers’ profits.
•
Consumer awareness is a key driver for scrapping alongside incentives.
EU
EU Directive 2000/53/EC on ELVs (2000)
Consumer - Pays nothing at ELV stage; return to authorised centres is free.
OEM - Bears full cost under
EPR. Designs vehicles for easier
recycling.
Recycler - Paid through
dismantling/scrap resale; must
meet environmental standards.
•
EPR ensures OEM accountability throughout vehicle lifecycle.
•
Consumer incentivised to scrap formally with zero cost.
•
Design-for-recycling is enforced.
Japan
Law for the Recycling of ELVs (2005)
Consumer - Pays a mandatory recycling fee upfront while purchasing vehicle.
OEM - Must manage recycling
of airbags, CFCs, and ASR using
collected funds.
Recycler - Operates under
government-approved framework;
costs reimbursed from fund.
•
Cost recovery is built-in and predictable.
•
Avoids informal disposal through prepaid system.
•
OEMs held accountable for specific high-risk components.
South Korea
Act for Resource Recycling of Electrical and Electronic Equipment and Vehicles (2008)
Consumer - No direct recycling fee; delivers vehicle to collection centre.
OEM - Shares responsibility (EPR-
inspired); must meet recovery
quotas.
Recycler - Also shares cost; must
report data quarterly; regulated
handling of ASR.
•
Shared responsibility distributes burden across value chain.
•
Strong reporting and compliance mechanisms.
•
Hybrid of EU regulation and Japan’s accountability.
USA
No national level ELV regulation exists
Consumer - May receive payment from recycler depending on vehicle condition.
OEM - No legal obligation; cost is
not directly borne.
Recycler - Bears cost but offsets via
resale of parts and scrap metal.
•
Market-driven model works when scrap has high resale value.
•
Lacks enforcement and formal infrastructure.
•
Environmental compliance ensured through strict laws for disposal of hazardous materials, e.g. oil, batteries, refrigerants.
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 18
Box 3.3 Understanding global good practices linked to ELV
management (contd.)
An RVSF in India
1
Informal Vehicle Scrapping in India
2
Vehicle Recycling Plant in Japan
3
Junk Car recycling in USA
4
Car Scrap plant in South Korea
5
Vehicle Scrapping facility in EU
6
There has been a gradual increase in the ATS and RVSF infrastructure in the country. The
incentives for scrapping, transmitted through the CoD as issued by RVSF when an ELV is
brought in for scrapping and used for providing up to 25% concession on motor vehicle
tax on registration, are intended to induce the consumer to scrap their ELVs in RVSFs, and
consequently there has been an increase in vehicles reaching RVSFs for scrapping.
1
The New Indian Express https://www.newindianexpress.com/
2
Factly https://factly.in/review-what-is-the-vehicle-scrapping-policy-all-about/
3
Keiaisha Co., Ltd https://www.keiaisha.co.jp/en/service/recycle/
4
Bonnie’s Car Crushers http://www.bonniescarcrushers.com/
5
YouTube, Amazing Korean Junkyard. Massive Scrap Car Process https://i.ytimg.com/vi/Nhf7fLZugZ4/
6
Recycling Today https://www.recyclingtoday.com/news/
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 19
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 20
4. Required ATS’s for ELV Management
4.1 Overview of Current Automated Testing Stations (ATS) Infrastructure
Central Motor Vehicles (Twenty First Amendment) Rules, 2021, defines an
“Automated Testing Station” as any automated testing facility, authorised by
the State Government, where vehicle fitness testing may be conducted through
automated vehicle testing equipment. The infrastructure requirements for an ATS
specify that any facility used for vehicle fitness testing must have a minimum per
lane area of 500 square meters for two-wheeler or three-wheeler vehicles, and 1500
square meters for Light, Medium, or Heavy Motor Vehicles. This area must include
appropriate space for administrative blocks such as a reception or information
centre, waiting area, IT server room and workstation. The Rules also mandate that
adequate provision must be made for parking and free movement of vehicles
brought for testing. Cybersecurity certifications are required for the Information
Technology systems to ensure secure access to the VAHAN database. Additionally,
facilities must provide sufficient space for installing essential utilities. Test lanes are
to be equipped with proper ventilation and a fume extraction system.
Figure 6: Infrastructure in an ATS
Source: Rabi Thankappan (2023), Automated Testing Station, Ahmedabad.
4.2 Geographical Distribution and Growth of ATS
As per the data available from MoRTH in Sep 2025, there are currently 156 operational ATS across 16 States and Union Territories but concentrated in few states like Gujarat, Andhra Pradesh, Madhya Pradesh and Uttar Pradesh (Figure 7).
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 21
Figure 7: Geographical Distribution of ATS as on 01.09.25
(Source: MoRTH)
Since FY 2023, there has been a rapid growth in the number of ATS set up every
year (Figure 8), and with the total ATS in the country expected to cumulatively be
close to the 250-mark as 114 ATS are expected to be set up in the next FY.
Figure 8: ATS setup in each FY
(Source: MoRTH)
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 22
4.3 ATS Infrastructure Requirement Analysis
An analysis was conducted using vehicle registration data from the VAHAN portal
4
,
along with the fitness testing standards for transport and non-transport vehicles
prescribed by the MoRTH. The fitness testing standards along with an assumed loss
factor is used to estimate the number of vehicles likely to come in for testing. The
estimate suggests a likely shortfall
5
in the availability of adequate infrastructure to
meet the requirements under the mandated fitness testing regime, considering each
ATS has the capacity to test 30,000 vehicles per annum. This infrastructure gap is
illustrated in Figure 9.
Box 4.1: Microeconomic Analysis of an ATS
This analysis considers the capital and operational expenditure required for establishing a two-lane ATS, designed to handle the testing of up to 100 vehicles per day, operating for approximately 300 days in a year. The average capital cost for the establishment of an ATS is reported to come out to around INR 10 Cr. For revenue estimation, an average testing fee is assumed based on the fee structure applicable to the vehicle categories with the highest testing share—primarily Light, Medium, and Heavy Motor Vehicles. Based on this approach, the financial assessment indicates that an ATS is a viable business model, with operational ATS units reporting revenue figures that are broadly consistent with these estimates.
Table 6: Cost and Revenue for an ATS
Header Value (Units)
Capital Cost per ATS (including cost of land) 10 Cr.
Operating cost per vehicle INR 400
Yearly Capacity of a single ATS 30,000 vehicles
Yearly operating cost 1.2Cr.
Average testing fee per vehicle INR 1,000
Yearly revenue for ATS 3 Cr.
Figure 9: ATS Infrastructure Gap
4
Data on vehicle registration by year, state/UT/National and year as provided on VAHAN SEWA dashboard
(https://vahan.parivahan.gov.in/vahan4dashboard/vahan/view/reportview.xhtml)
5
The visual representation on number of vehicles to be tested against testing capacity is provided in
Annexure B
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 23
Based on the methodology used in the analysis and state-wise vehicle registration
data from the VAHAN portal, the estimated requirement of ATS has been calculated
for each State and Union Territory
6
. As of now, the total projected requirement for
the coming years stands at 500 ATS till 2027, indicating a shortfall of 344 facilities
when compared to the existing infrastructure.
4.4 Various Business Models to Establish an ATS
Currently, ATS are established by State Governments through four distinct models.
These different models are briefly explained:
4.4.1 Privately owned and operated enterprise
Individual private entities—such as auto service firms, diagnostic centres, or
dealerships—can establish, own, and operate ATS facilities under the regulatory
framework. These centres must be self-financed, meet all technical, environmental,
and digital integration standards, and obtain certification from the State Transport
Authority. Full financial and operational responsibility lies with the operator, and
approval is subject to land ownership/lease compliance and digital integration
norms. This model is being followed in Gujarat currently.
4.4.2 Setup by State, operations outsourced to a private vendor
In this model, the State Government sets up the ATS infrastructure—typically using
public land or funding—while day-to-day operations are outsourced to a private
vendor selected through competitive bidding. A service-level agreement governs
performance, digital compliance, and reporting. The operator is compensated
through user charges or a revenue-sharing arrangement. Odisha has used this model.
4.4.3 Privately set up, the state selects concessionaire through bidding
Bids are invited from eligible private concessionaires to set up ATS at designated
locations, evaluated on technical and financial criteria to ensure quality and viability.
Selected concessionaires are granted exclusive operational rights for a fixed term,
typically 5–10 years. While the state may facilitate regulatory and land approvals,
the infrastructure is entirely financed and operated by the concessionaire, who must
comply with state directives on test protocols, fee structures, and digital integration.
E.g. - Punjab
4.4.4 Set up and operated through a Public-Private-Partnership (PPP) model
This Public-Private Partnership (PPP) model invites private entities to invest, build,
and operate ATSs over the long term, with the government acting as facilitator and
regulator. Operators—often capped in number—are responsible for the full project
lifecycle, using self-financed facilities on owned or leased land, and must comply
with inspection and data-sharing protocols. E.g. – Followed by most of the States
for ATS setup.
Among these, the private ownership model has demonstrated the highest level of
success. In Gujarat (which follows this model), 56 ATS have been set up under this
model, generating a cumulative revenue of INR 109 crore (Figure 10). Notably, the
top-performing ATS in the state earns approximately INR 6 crore annually.
6
Full table of ATS required all States and UTs provided in Annexure C respectively.
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 24
Figure 10: State-wise ATS Revenue
(Source - MoRTH (AFMS)) as on 01.09.2025)
4.5 Key Challenges and Proposed Solutions
The development of a formal vehicle fitness testing ecosystem to support the
circular economy of ELVs through ATS faces the following major challenges:
4.5.1 Limited creation of ATS infrastructure across the country
The rollout of ATS infrastructure critical to supporting the formal ELV ecosystem
remains limited in scale and penetration. While pilot initiatives and early adoption
are evident in a few progressive states, the pace of infrastructure development has
been slow and uneven. This limited uptake has relegated the infrastructure to a
narrow geographic and functional footprint.
4.5.2 Regional imbalance in existing infrastructure
Even where such infrastructure has been established, there exists a significant
regional skew in its distribution. Most of the operational facilities are concentrated
in a handful of states, leading to pronounced disparities in access to vehicle fitness
testing infrastructure across the country. Several large states, particularly in eastern
and North-Eastern India, currently have negligible or no operational facilities,
resulting in limited reach and low testing numbers. This regional imbalance not
only undermines the objective of creating a uniform national framework for ELV
management, but also impedes the identification of ELVs currently on-road which
need to be scrapped.
4.5.3 Improper issuance of fitness certificates
Instances have emerged in some states where ATS are operating without requisite
infrastructure, issuing fitness certificates without conducting proper tests—often in
the absence of the vehicle—through intermediaries. Such practices not only bypass
mandated testing protocols but also impose unofficial premiums on consumers
beyond MoRTH-notified fees. If unchecked, such issues pose a serious risk to road
safety and undermines the integrity of the ELV recycling ecosystem. Addressing
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 25
this challenge requires stringent auditing, regulatory oversight, and enforcement,
alongside the continued expansion of credible, accessible ATS infrastructure to curb
any malpractices.
Key Action Points
MoRTH in association with the States may undertake the following:
1) May utilise SASCI funds to adopt a privately-owned vehicle testing facility model, particularly
in regions where the market potential and ELV volume can
support such investments.
2) In states or union territories with limited vehicle population and no existing scrapping ecosystem
— such as Ladakh, Sikkim or Arunachal Pradesh — it
is suggested that government-owned infrastructure must be developed for ATS.
3)
ATS may be set up and operated in a district as per a particular business
model on the basis of the following classification with regards to vehicle density.
Table 7: Vehicle Density and ATS viability
Vehicle Density of District
Recommended Mode of Setup and
Operation of ATS
<10,000 Government owned and operated
10,000-18,000 Public-Private-Partnership mode
> 18,000 Commercially viable, privately owned
4) A goal of 1 ATS per district may be adopted for setting up an ATS infrastructure
that is sufficient to account for required testing of vehicles.
5) State Transport Departments shall conduct audits and monitor established ATS operations
and close down those ATS which are found to be violating
laid down rules and procedures.
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 26
5. Infrastructure Requirements and Other Aspects
of R
VSFs
5.1
Overview of Current Registered Vehicle Scrapping Facilities (RVSF) Infr
astructure
The Motor Vehicles (Registration and Functions of Vehicle Scrapping Facility) Rules,
2021 defines “Registered Vehicle Scrapping Facility” means any establishment which
holds a Registration for Vehicle Scrapping issued under these rules for carrying out
dismantling and scrapping operations. As per the Guidelines for Environmentally
Sound Facilities for Handling and Scrapping of End-of- Life Vehicles (ELVs), (Revised),
2023, RVSFs are required to meet comprehensive infrastructure standards to ensure
safe, environmentally sound, and efficient scrapping operations. Each facility may
be equipped with a shredder or baler for vehicle dismantling and have a designated
area for parking, depollution, dismantling, segregation, baling/shredding, and scrap
storage. ELVs must be parked on non-permeable surfaces such as asphalt, concrete,
or epoxy-coated flooring with adequate drainage. Facilities must use certified
depolluting equipment to prevent leakage during the draining of fuels, fluids, and
gases, and employ certified de-risking equipment for the safe neutralisation and
removal of airbags, pre-tensioners, and other safety components. Dedicated areas
must be provided for storing segregated scrap and reusable spares.
Figure 11: Infrastructure in an RVSF setup
(Source: Urban Acres7 )
5.2 Geographical Distribution and Infrastructure Growth of RVSFs
5.2.1 Geographical Distribution and Setup
At present, a large number of RVSFs are largely located in northern states such
as Haryana and Uttar Pradesh, while the remaining are spread in limited numbers
across other parts of the country. A possible reason is the proximity of the RVSFs
to the NCR, which has stringent restrictions regarding the plying of vehicles over
7
https://urbanacres.in/tata-motors-opens-vehicle-scrapping-unit-in-kolkata/
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 27
10/15 years of age, making it a source of potential feedstock. According to the latest
data available from MoRTH, as on 1 Sep 2025 there are currently 117 operational
RVSFs functioning across 21 States and Union Territories, with a total of 178 RVSFs
approved (including those operational) (Figure 12).
Figure 12: Geographical Distribution of RVSFs as on 01.09.25
(Source: MoRTH)
Since FY 2023, there has been a marked increase in the number of RVSFs being set
up every year, and the trend is expected to continue, helping to push new operational
RVSFs set up around the 50-mark by next financial year (Figure 13).
Figure 13: RVSF set up in each FY
(Source: MoRTH)
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 28
5.2.2 RVSF Infrastructure Requirement
Based on state-wise vehicle registration data from the VAHAN portal, the estimated
requirement of RVSF has been calculated for each State and Union Territory
8
. As
of now, the total projected requirement for 2027 stands at 227 RVSFs, indicating a
shortfall of 49 facilities when compared to the existing infrastructure.
Box 5.1 Microeconomic Analysis of RVSF
This analysis presents an overview of the capital and operating costs, as well as
revenue potential, for a Registered Vehicle Scrapping Facility (RVSF) with an
annual processing capacity of 20,000 vehicles. The average capital cost for the
establishment of an RVSF (with the cost of land and machinery for scrapping) is
estimated to be around INR 14 Cr.
Assumptions:
1. Average ELV procurement cost: ₹25,000 per vehicle
2. Operational cost of scrapping: ₹6,500 per vehicle
3. Total variable cost: ₹31,500 per vehicle
4. Kerb weight of average vehicle: 1,500 kg
5. Steel content: 60% (≈ 900 kg or ~1 tonne)
6. Scrap steel market price: ₹35,000 per tonne
Based on these assumptions, the average revenue from scrap steel per vehicle
is estimated at around ₹35,000. At 100% capacity utilisation, the RVSF model
appears commercially viable with reasonable profit margins. However, current
utilisation rates of RVSFs are reported to be below 20%, which significantly affects
their financial viability.
Considering the above, and assuming an RVSF continues operating in the current
Business-As-Usual (BAU) scenario, it can be expected to reach its break-even point
in its tenth year of operation.
Figure 14: Break-even point for an RVSF
8
Full table of RVSF required all States and UTs provided in Annexure E respectively.
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 29
5.3 Overview of Informal Vehicle Scrapping in India
Despite the push for formalisation under the Vehicle Scrapping Policy, India’s
ELV recycling landscape continues to be predominantly shaped by unregulated
or informal sector operators. These entities account for a significant share of ELV
processing due to a range of economic and structural advantages:
•
Higher economic realisation for vehicle owners: Informal scrappers typically offer higher upfront scrap value by bypassing environmental compliance costs and taxes.
•
Low transaction and access costs: Informal units are geographically dispersed,
embedded in local economies, and easily accessible compared to formal RVSFs.
• Limited enforcement and awareness: The absence of mandatory de-registration and traceability for vehicles allows continued diversion toward informal channels.
The informal scrapping sector has historically served as the backbone of India’s
ELV ecosystem,
offering widespread coverage across peri- urban and rural areas and generating employment for low-skilled labour. For decades, these operators have functioned as the primary handlers of ELVs, facilitating dismantling, material recovery, spare parts reuse, and feeding downstream scrap markets. Their continued contribution to the resource economy underscores the importance of recognising their role in the transition towards a circular and sustainable ELV framework.
A balanced approach to formalisation must focus on inclusion rather than penalties.
Quick integration of informal operators into the formal ecosystem may be enabled
through targeted measures such as capacity building, technical training, access to
modern dismantling tools, and facilitation into OEM-linked RVSF networks. Simplified
licensing, access to finance, and regulatory compliance support have been extended
in an effort to ensure meaningful participation of this segment in the formal value
chain.
Since the launch of the vehicle scrapping policy, MoRTH has engaged in investor
promotion across 30 States and UTs. Of the 98 RVSFs currently operational, many
RVSFs are those which have transitioned from the informal sector. These include
small enterprises with limited turnover; entities affiliated with OEMs, dealerships,
and service providers, as well as entrants from non-automotive sectors. MoRTH
continues to onboard informal players through investor facilitation and MoUs to
strengthen the formal ELV ecosystem.
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 30
Box 5.2 Informal ELV Scrapping in India
A ground survey conducted in May 2025 across 17 States and Union Territories,
covering over 200 informal scrapping units, revealed that despite lower upfront
pay-outs, RVSFs tend to deliver greater overall benefits to citizens in terms of
safety, compliance, and environmental standards. Based on the survey, the
informal sector is estimated to have an annual scrapping capacity of around 2–3
lakh ELVs, whereas RVSFs scrapped approximately 72,000 vehicles in FY 2024–
25, accounting for nearly 25% of the informal sector’s scale.
Figure 15 highlights 25 identified informal clusters engaged in end-of-life vehicle
(ELV) handling and related activities across various regions of the country.
Figure 15: Current Informal Clusters for Vehicle Scrapping
(Source: MoRTH)
5.4 Bridging the Informal-Formal Price Gap
A significant price difference—estimated in the range of 60% to 65%—continues
to exist between informal and formal ELV disposal channels. This gap significantly
influences the decisions of vehicle owners, who are more likely to opt for informal
operators that do not adhere to prescribed environmental and safety norms, thereby
undermining the sustainability objectives of the government.
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 31
Insights from primary research and stakeholder consultations, particularly with
RVSFs, indicate that informal operators consistently offer higher prices to ELV
sellers. This pricing advantage stems from several factors:
• Minimal investment requirements and operating costs
• Evasion of GST
• Non-compliance with environmental standards
• Resale of spare parts
A sample analysis below considers the example of a Swift Dzire-equivalent car
of approximately INR 7 lakh available for scrapping. The seller of the car has two
options: The informal sector can offer a price of around INR 38,000 whereas an RVSF
would be able to offer a price of INR 23,000. This price differential of approximately
₹15,000 presents a price differential that needs to be addressed through targeted
interventions, incentives, and regulatory enforcement to shift ELV flows towards
formal and environmentally compliant scrapping channels.
Given this price differential, two key issues need attention —
i) Profit margin available to the RVSF
ii) Limited perceived value for the consumer (the ELV seller)
Addressing these will help RVSFs offer better prices for ELVs, knowing they can
recover good value, and encourage consumers to choose authorised scrapping
centres to understand the overall benefits they receive by accessing formal scrapping
facilities.
5.4.1 Price Differential - RVSF Perspective
The possible revenue streams from processing a single ELV, based on the example
given above, at an RVSF is presented in Figure 16. To bridge the price differential of
INR 15,000, potential value added of INR 9,500 or more can be generated from sale
of used spare parts, and up to INR 5,500 from Extended Producer Responsibility
(EPR) credit sales. It highlights the need to unlock the full value chain to make RVSFs
price-competitive with informal sector players.
Figure 16: RVSF-Informal Scrapper Price Differential – RVSF Perspective
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 32
5.4.1.1 Sale of spare parts by RVSF
The sale of re-used, refurbished, and remanufactured spare parts from ELVs, based
on internal analysis and stakeholder interaction, has emerged as a significant source
of revenue in the informal scrapping sector, driven especially by the increasing
demand for low-cost vehicle replacement parts
9
, ease of vehicle reparability and
increasing number of vehicles on road. However, there are certain challenges in sale
of salvaged spare parts in India due to the largely unorganized market, regulatory
restrictions on parts usage, lack of an established system for certifying reusable
parts and the absence of systems to track and verify the origin, condition, and
history of salvaged parts. This undermines transparency and reliability for a user of
such second life parts.
While the sale of spare parts is already prevalent as a business model, it currently
takes place outside the purview of formal regulation and is usually recorded under
the sale of bulk scrap by RVSF. The spare parts sold as bulk scrap end up finding
their way to informal part dealers. Formalising the spare parts ecosystem enables
spare parts to be refurbished and sold with measures for proper accounting and
certification. This will serve to add value to the spare parts industry as well.
Box 5.3 Reuse, Refurbishment and Remanufacture of Vehicle Spare
Parts
Re-use
Re-use of vehicle spare parts refers to the practice of taking parts
from end-of-life vehicles, reconditioning them, and then using them as
replacements in other vehicles. For effective re-use, it is integral that
used components do not cause any safety or environmental risks.
Refurbish
Refurbishing vehicle spare parts involves restoring used auto parts
to a like-new or near-new condition. This process typically includes
thorough cleaning, inspection, repair, and sometimes the replacement
of worn components.
Remanufacture
Remanufacturing of vehicle spare parts refers to the industrial process
of restoring used, worn, or discarded automotive components to a
condition that meets or exceeds original equipment manufacturer
(OEM) specifications, using a standardized and controlled procedure.
9
A list of spare parts for a car along with their prices is given in the Appendix.
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 33
5.4.1.2 Sale of EPR Certificates
The sale of Extended Producer Responsibility (EPR) certificates by RVSFs, through
transactions with vehicle manufacturers as obligated under the Environment
Protection (End-of-Life Vehicles) Rules, 2025 notified by the MoEFCC, is expected
to provide the necessary financial buffer to ensure operational sustainability and
incentivise formalisation of ELV scrapping activities. The revenue gap with the
informal scrappers is estimated to be reduced by INR 5,500 to enhance the financial
viability of RVSFs.
The EPR mechanism, therefore, serves as a market-based policy instrument aimed
at ensuring the financial viability of end-of-life material recovery across sectors as
a part of India’s circularity roadmap. For ELVs, the principle remains consistent—by
placing end-of-life processing responsibility on producers, EPR creates a compliance-
driven demand for certificates, thereby transferring part of the financial obligation
to OEMs and encouraging sustainable product lifecycle management.
However, it is imperative to revisit and refine certain provisions under the current
EPR framework for ELVs. The current EPR targets have been intentionally kept
low to account for the initially limited inflow of ELVs to RVSFs. While this reduces
compliance pressure on OEMs, it also limits the economic viability of RVSFs, as
the volume of EPR credits generated remains insufficient to create a meaningful
revenue source for RVSFs. To strengthen the formal scrapping ecosystem, a
differentiated approach to EPR is warranted—retrospective EPR targets may remain
modest, increasing gradually with time; more ambitious prospective targets may be
introduced in line with the projected increase in ELV feedstock, supported by the
expansion of ATS/RVSF infrastructure and regulatory enforcement. A suggested
regime for retrospective EPR targets against current EPR target and compliance
periods is given in Table 8
10
. Additionally, the inclusion of EPR certificate generation
from automotive production scrap—as currently permitted—may dilute the intended
outcomes of the policy and its inclusion may be allowed as an additional source
of EPR certificates besides the mandatory 8% under EPR notification. The EPR
framework must focus exclusively on actual ELV recycling, to drive investments
into formal scrapping infrastructure, and ensure alignment with circular economy
objectives.
Table 8: Suggested Revisions to Current EPR Regime
^ Year of manufacture of vehicles from which steel is to be recovered
10
A visual representation of steel recovery from current and suggested EPR regimes against total RVSF
capacity currently approved (as per MoRTH data) is provided in Annexure F
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 34
Prospective targets for cars currently manufactured need to be revised upwards
significantly to cope with the volume of expected ELVs in the future. One such
prospective EPR regime is highlighted in Table 9, which may be adopted after due
deliberations with stakeholders by MoEFCC.
Table 9:Prospective EPR Targets
^Year of manufacture of vehicles from which steel is to be recovered
5.4.2 Benefits Accrued to Consumers
Based on Figure 16, when the price gap between informal scrappers and Registered
Vehicle Scrapping Facilities (RVSFs) is bridged, formal scrapping becomes
competitive and enables RVSFs to offer comparable prices to consumers. As
illustrated in Figure 17, the potential consumer benefit from scrapping a vehicle
through an RVSF is ₹38,000. Further, the consumer can receive an additional
benefit of ₹22,500 through the Certificate of Deposit (CoD) and showroom (OEM)
discounts on the purchase of a new vehicle.
figure 16
Figure 17: Benefits Accrued to Consumer
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 35
5.4.2.1 Certificate of Deposit (CoD)
Currently, 21 States/Union Territories
11
have so far as on 1 Sep 2025 declared Motor
Vehicle (MV) Tax concessions on purchase of a new vehicle against CoD. The
majority of states have adopted the MoRTH-recommended CoD concessions model
(Table 10), although the implementation of concessions is not uniform:
MV Tax Concession
Transport Vehicle Non-Transport Vehicle
• 15% of tax leviable • 25% of tax leviable
The Central Motor Vehicles (First Amendment) Rules, 2025 offers concession up
to 50% of tax leviable for:
• All transport and non-transport vehicles which are manufactured as per BS-I and earlier emission norms
•
All medium and heavy goods motor vehicles and all medium and heavy passenger motor vehicles which are manufactured as per BS-II norms
The provision for the CoD’s Motor Vehicle (MV) Tax concession is a substantial
amount. For the example as seen in Figure 17, upon purchase of a new car worth INR
7 lakh, MV tax of ~7% needs to be paid
12
. This amounts to INR 49,000. With the CoD,
a 25% discount will be offered, amounting to INR 12,000. If implemented across all
states, the concession on MV Tax would have a significant motivation in driving ELVs
towards the formal scrapping ecosystem. MoRTH has recently issued a notification
which would increase the recommended CoD concessions up to 50% of MV tax,
against CoD for all transport and non-transport vehicles which are manufactured
as per BS-I norms and all medium and heavy goods and passenger motor vehicles
which are manufactured as per BS-II norms. This would further increase the incentive
of consumers scrapping their vehicles at RVSFs. It is important to note, that the
transmission of benefits due to CoD are dependent on the sequence of the buy/sell
cycle by the consumer (Table 11).
Table 11: Different Kinds of Consumers who scrap ELV
S. No. Consumer Behaviour Expected Gain from CoD
Expected Gain
from OEM
Discount
1 Sell first and buy laterINR 12,000 or more
INR 10,000 or
more
2 Buy* first and sell later
Monetise ELV certificate
on DigiELV (INR
4000~8000)
No discount
available
3 Does not buy at all
*Buy implies a new vehicle is bought
11
A summary table of CoD MV Tax concessions as declared by various states is provided in the Annexure H
12
As per norms in the National Capital Territory of Delhi
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 36
Box 5.4 DigiELV Process for Purchase of CoD
Process for Selling a Certificate of Deposit (CoD):Process for Selling a Certificate of Deposit (CoD):
User may access the DigiELV portal through registered credentials to sell CoD to
interested buyer
Process for Buying a Certificate of Deposit (CoD):Process for Buying a Certificate of Deposit (CoD):
Interested buyer may access the DigiELV portal through registered credentials and
offer bids for buying CoDs listed by sellers
The purchased CoD is transferred to the buyer’s account and can be used for:
• Availing vehicle scrappage incentives
• Applying for benefits during new vehicle registration
Table 12: Transaction Volume of CoDs in DigiELV and their Average Price as on 01.09.2025
Category Total Trades Average Trade Price (`)
2-Wheeler (Non-Transport) 777 1,824
3-Wheeler (Transport) 17 1,677
4-Wheeler Invalid Carriage3 7,782
Heavy Goods Vehicle 148 9,351
Heavy Passenger Vehicle 5 9,007
Light Goods Vehicle 452 3,132
Light Motor Vehicle (Non-
Transport)
69,390 10,814
Light Passenger Vehicle 390 5,972
Medium Goods Vehicle 8 7,594
Medium Motor Vehicle 3 6,533
Others/Unspecified 3 1,068
Total Market 71,196 10,634
5.4.2.2 Showroom Discount from Automobile OEMs
The Hon’ble Minister for Road, Transport and Highways had announced on 27 Aug
2024 the provision of discounts ranging from 1.5-3.5% (about Rs 10,000 to Rs 24,500
for a 7 lakh car) by automobile OEMs on new vehicles purchased against proof of
scrapping of ELV, to bridge the gap in incentives between formal and informal ELV
disposal and encourage ELV scrapping at RVSF. However, transmission issues with
the OEM discount are apparent as vehicle dealerships tend to club multiple discounts
together, with limited visibility to OEMs on the additionality of the discount offered
against CoD.
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 37
5.5 Key Challenges and Proposed Solutions
5.5.1 Limited adoption of infrastructure across the country
The rollout of RVSF critical to supporting the formal End-of-Life Vehicle (ELV)
ecosystem remains limited in scale and penetration. While rapid growth of RVSFs has
been seen adopted in a few progressive states, the pace of scrapping infrastructure
development has been slow and uneven. This limited uptake has constrained the ability
to transition away from informal sector dominance, relegating formal scrapping to a
narrow geographic and functional footprint.
5.5.2 Regional imbalance in existing infrastructure
There exists a significant regional skew in RVSF distribution. Most operational facilities
are concentrated in a few states, leading to pronounced disparities in access to formal
ELV scrapping infrastructure across the country. States, particularly in eastern and
North-Eastern India, currently have negligible or no operational facilities, resulting in
limited reach and low consumer uptake of formal scrapping channels. This regional
imbalance not only undermines the objective of creating a uniform national framework
for ELV management, but also impedes the realisation of environmental, economic,
and safety benefits associated with formal scrapping practices.
5.5.3 Registration and compliance process for RVSF
The current process for registration of an RVSF involves multiple authorities (SPCB
and State Transport Commissioner), leading to delays and inefficiencies, adding
to the compliance burden thereby hindering smooth setup of RVSF. There is no
standardized and clear procedure for certifying RVSF equipment as mandated by
MoRTH, resulting in ambiguity for both businesses and regulators. It is suggested that
MoRTH allow State Transport Commissioners to give deemed approval if the RVSF
can obtain Consent to Operate (CTO)/Consent to Establish (CTE) from the relevant
SPCB to ease out the approval procedure for establishing an RVSF. The creation of a
single certifying authority with clear standards and procedures for RVSF equipment
certification would ensure consistency and reliability.
5.5.4 Limited ELV feedstock reaching RVSFs
At present, RVSFs across the country are operating at suboptimal capacity due
to insufficient inflow of ELVs. Despite the establishment of formal scrapping
infrastructure in select states, the volume of vehicles reaching these facilities remains
low. A substantial proportion of ELVs continues to be diverted to informal channels,
driven by lack of awareness, weak enforcement of de-registration norms, and absence
of strong economic incentives for owners to opt for formal scrapping. The resulting
underutilisation directly impacts the business viability of RVSFs, constraining their
ability to recover fixed costs, invest in skilled manpower, and maintain environmentally
sound operations as per regulatory standards.
5.5.5 Intense competition from informal sector operators
Informal scrappers typically offer vehicle owners a higher price for ELVs due to
lack of necessary compliance-related costs. They enjoy greater ease of access and
convenience due to their localised presence. This cost advantage continues to
divert ELVs away from RVSFs, thereby eroding the economic case for formalisation.
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 38
Key Action Points
MoRTH in association with the CPCB may undertake the following reforms:
Enhancing Accessibility and Coverage of RVSFs
1) Government-operated or PSU-led RVSFs may be established in regions where
private facilities are not commercially viable, with capital investment borne by
the government or PSU and operations managed by a private concessionaire
under a structured concession agreement to ensure wider national coverage.
Easing set-up proc
ess for an RVSF
1)
MoRTH may make modifications in Motor Vehicles (Registration and Functions
of Vehicle Scrapping Facility) Rules, 2021 to:
a. Allow a single approval authority for RVSF set-up by authorising State Transport Commissioners to give deemed approval if the RVSF can obtain CTO/CTE from the relevant SPCB.
b. Establish a single certification authority for RVSF equipment.
Addr
essing Informal Vehicle Scrapping
Recommendations for concerted initiatives by MoRTH, CPCB and SPCBs are as follows:
1)
Informal vehicle dismantling clusters may be encouraged to transition to the formal sector through structured incentive mechanisms, followed by regulatory measures, ensuring a phased and inclusive approach.
a.
MoRTH, in collaboration with SPCBs may undertake onboarding of identified
informal vehicle scrapping clusters within a defined timeline.
b. Part of SASCI may be apportioned to informal sector integration against
a strict timeline supported by awareness campaigns and streamlined compliance support.
c.
Udyam Assist Platform of Ministry of Micro, Small & Medium Enterprises
(MoMSME) may be utilised to help in onboarding the informal scrappers.
d. State governments may provide a one-time waiver of outstanding
environmental liabilities, thereby enabling informal operators to overcome initial financial and regulatory entry barriers.
e.
State Government may consider establishment of common de-pollution
facilities for small dismantlers operating in informal clusters to ensure environmental safeguards and cost-effective shared infrastructure.
f.
Inter-ministerial consultation by MoRTH with NITI Aayog, MoEFCC and MoMSME may
be initiated to develop action plan/scheme for formalising
the informal vehicle dismantling sector.
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 39
Key Action Points (contd.)
Enhancing RVSF Business Viability
The following action points for MoRTH include:
1) Spare Parts Ecosystem –
a. A dedicated committee may be constituted by MoRTH to strengthen the
ELV-based spare parts reuse ecosystem involving, MHI, SIAM and ACMA.
i. It may recommend certification standards, operational guidelines, and
policy measures.
ii. Current rules (such as Automotive Industry Standard (AIS)-129, which contains a negative list of spare parts prohibited for re-sale) may be updated to accommodate harvesting of spare parts for refurbishing.
iii.
A regulated marketplace for the sale of such spares may also promote their use extensively.
iv.
Vehicle components may be designed with ease of disassembly, standardisation, and
modularity in mind, enabling efficient reuse and
repair.
2) Extended Producer Responsibility (EPR)
a. May be strengthened by raising recovery targets, both prospective and retrospective, in view of increase in RVSF capacity and expected feedstock. (Section 5.4.1.2, Table 8 and 9)
b.
Inclusion of automobile production scrap as eligible for EPR may be revisited.
3)
Certificate of Deposit (CoD) – Uniform best-practice concessions for CoD
may be adopted consistently across all States and Union Territories.
4) Showroom Discounts – Vehicle showroom quotation booklets should include
a dedicated column showing discounts availed through CoD separately, ensuring transparent benefit transmission.
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 40
6. Simplifying Vehicle-Owner Related Procedural
Issues
The VAHAN database keeps the record of all vehicle ownership but can be accessed only
through RTO office for even minor transactions. This chapter looks into the systematic
reforms to enable a user to access VAHAN in a more citizen friendly approach.
6.1 De-registration process of ELV from VAHAN database
Currently, de-registration can happen with or without the involvement of RVSFs. The
documents required for de-registration are original Registration Certificate (RC),
chassis number cut out from vehicle, physical evidence of scrappage and affidavit
of no dues and legal pending cases. A large proportion of ELVs remain officially
registered despite having been scrapped, resulting in discrepancies within the vehicle
registry. Vehicle owners normally do not initiate the de-registration process, as there
is currently no legal or financial penalty for failing to do so. Moreover, when such
vehicles are scrapped informally outside authorised channels, Regional Transport
Offices (RTOs) are unable to verify whether scrappage has actually occurred.
Currently, legal liability lies with the consumer in whose name the car is registered
in case the vehicle is used for any nefarious activities. Consumer needs to be made
aware about consequences associated with vehicles scrapped through informal
sector without formal de-registration. The submission of the CoD as mandatory
documents for vehicle de-registration shall be mandated to ensure proper tracking
and verification.
6.2 Enhancing the VAHAN portal
The VAHAN portal, developed by MoRTH, is a centralized platform for managing
vehicle registration, taxation, and compliance in India. The presence of a large
number of informally scrapped vehicles which still have not been de-registered
and data inaccuracies due to vehicles which were de-registered before VAHAN
was functional, compromises the integrity of the database. The portal’s complex
navigation, data security concerns, and lack of adequate customer support hinder
user experience. The vehicle ownership transfer and penalty resolution processes
are complex and cumbersome.
Recently, MoRTH has taken steps to optimise transparency and data quality; and
improve the Ease of Doing Business through digital portal enhancements on the
VAHAN platform. An unfit vehicle dashboard has been introduced for RVSFs and
Regional Transport Offices (RTOs) to support enforcement efforts (Figure 18).
Additionally, a government vehicle dashboard, providing access to data on vehicles
older than 15 years, has been made available to State Transport Commissioners. A
scrap value discovery module has been launched on V-Scrap to benefit both citizens
and RVSFs; to address the absence of any accessible mechanism to get a transparent
valuation of the ELV by consumers, which leads to information asymmetry in decision
making. Furthermore, automated fitness reports are now generated through an end-
to-end encrypted system to ensure improved compliance.
There still remain specific issues that may be addressed in the interest of creating
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 41
a more accessible ELV management ecosystem for consumers. This will streamline
the process and ensure accountability on part of the vehicle owner during ownership
transfer and vehicle scrapping.
Figure 18: Unfit Vehicle Dashboard (Visible to RVSF owners and State Administration
on V-Scrap Portal)
(Source: VAHAN V-Scrap Portal User Manual)
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 42
Key Action Points
MoRTH may undertake the following:
Strengthening the Vehicle Deregistration Framework
1) May mandate that deregistration of vehicles at Regional Transport Offices
(RTOs) shall only be permitted upon submission of a CoD issued by a RVSF,
ensuring formal end-of-life disposal, with certain exceptions.
2) May introduce a legal obligation based on both incentives and disincentives
on vehicle owners to initiate compulsory deregistration of ELVs, to ensure responsible disposal and formal processing.
a.
Rule 55 of The Central Motor Vehicles Rules, 1989 makes transfer of ownership a legal mandate, but the vehicle owner has no liability except in the case where the vehicle is used for illegal purposes after ownership transfer.
Enhancing the VAHAN P
ortal
1)
Removal of old data – Removal of registered vehicles which are identified as
no-longer plying on roads from the VAHAN database.
2) Introduce Aadhar-based ownership transfer and penalty accrual of vehicles –
a. Aadhar OTP-based transactional handshake to authenticate vehicle transfer between buyer and seller. (See Box 6.1)
b.
Aadhar based checks will provide a framework to eliminate need for physical visits
to Regional Transport Office (RTO) for vehicle-related
transfers.
c. All penalties may be accrued to the Aadhar of the vehicle owner rather than the vehicle itself.
3)
Integration of DPI into VAHAN portal - Application Programming Interface
(APIs)/Digital Public Infrastructure (DPI) may be used to synchronize data with other sources like FASTag, service centres, petrol pumps etc. ensuring accurate and up-to-date information.
4)
Integration of ELV valuation module in VAHAN portal - Scrap value discovery
on the V-Scrap portal may be enhanced using a Kelley Blue Book–like model to enable fair and standardised ELV valuation.
5)
Information dissemination/booking service for RVSF/ATS –
a. Development of marketplace for related services, such as disposal services,
ATS certifications, etc. to enhance functionality and user experience.
b. Provision of 24/7 AI-driven customer support through a chatbot to improve user assistance and resolution time.
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 43
Box 6.1 Aadhar-Based Ownership Transfer
Figure 19: Aadhar-based Vehicle Ownership Transfer
For procedural ease and efficiency in vehicle ownership transfers, it is important
to adopt mechanisms that eliminate the need for all transactions to be physically
conducted at an RTO, while still ensuring that the transfer is duly recorded in the
VAHAN database. The Aadhar OTP-based transactional handshake serves this
purpose by enabling secure, remote authentication of both parties in the transfer
process.
The process begins with the seller (vehicle owner) logging into the VAHAN portal
and validating the vehicle’s registration number, chassis number, or Aadhar through
an OTP. The seller then opts to transfer ownership of vehicle and enters the buyer’s
details, including name and mobile number linked to Aadhar. An OTP is sent to the
buyer’s registered mobile number to link their Aadhar with the vehicle registration
number. The buyer validates the transfer by entering the OTP. Once validated, the
buyer is onboarded on VAHAN and provides any additional details required for
generating a new RC from their selected local RTO. The seller pays the transfer fee,
and the information is passed to the RTO for issuance of the new RC, completing
the authenticated transfer process.
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 44
7. Strengthening Consumer Awareness on
R
ecycling Ecosystem
7.1 Lack of Consumer Awareness
A lack of consumer awareness is an important reason for the limited inflow of
vehicles to RVSFs. To address this issue, a continuous and targeted dissemination of
information related to vehicle scrapping and the role of RVSFs may be institutionalized
across all relevant stakeholders. While the overarching communication strategy may
be led by the MoRTH, collaborative efforts of OEMs, RVSFs, and State authorities
are essential.
7.2 Communication strategy
To enhance awareness and drive greater adoption of formal scrapping practices,
MoRTH may scale up national-level outreach campaigns through both print and
digital media. Leveraging the VAHAN database, the Ministry may send targeted
communications to vehicle owners whose vehicles are nearing ELV status.
Additionally, periodic alerts can be issued to registered vehicle owners encouraging
them to voluntarily scrap their vehicles at authorised RVSFs.
OEMs play a critical role in building consumer awareness at the point of sale and
beyond. It is recommended that OEMs mandatorily inform all new vehicle buyers
about the vehicle scrapping process and the availability of RVSFs. Further, they
may actively reach out to existing customers through SMS and email alerts, offering
trade-in incentives linked to scrapping. OEMs may also collaborate with RVSFs to
ensure a seamless and user-friendly scrapping experience.
RVSFs themselves must undertake sustained public engagement efforts. These
may include regular awareness campaigns and targeted advertisements aimed
specifically at ELV owners. RVSFs can further expand their reach by partnering
with automotive brands, dealerships , and fuel stations. Establishing collaborative
arrangements with OEMs would also facilitate smoother scrapping transactions and
improve consumer trust in the formal scrapping ecosystem.
All stakeholders—must jointly ensure that the list of authorised RVSFs and ATS
is readily available on the official websites of RTOs, state transport departments,
OEMs, and RVSFs. This step will provide vehicle owners with easy access to reliable
information and encourage greater participation in the formal ELV disposal process.
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 45
Key Action Points
Public Awareness
MoRTH, MoEFCC and MHI may undertake public awareness initiatives:
1) Awareness campaigns may explicitly highlight the responsibility of the
vehicle owner to de-register ELVs once sold or retired, to prevent misuse
and promote legal compliance.
2)
Promote vehicle scrapping during key national events such as Recycling Day, Upcycling Day, and other relevant public initiatives.
3)
Promotion of vehicle scrapping as a responsible practice by senior leadership during public outreach forums.
4) OEM’s to promot formal recycling for the old cars of new buyers.
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 46
8. Other Innovative Interventions
While the important initiatives to bridge the financial difference between informal and
formal sector as well as legal measures have been discussed in the earlier chapter, this
explores innovative ideas to supplement the existing framework to support the RVSFs.
The following may be taken up by the relevant ministry as per their merit.
8.1 Carbon Credits
The scrapping of ELVs presents a significant opportunity for emissions reduction
through the environmentally sound dismantling and material recovery of metals,
plastics, glass, and other components. Unlike unsustainable disposal practices,
formal recycling undertaken by RVSFs results in measurable emission savings. These
savings can be monetised through the generation and sale of carbon credits in
offset mechanism of Indian Carbon Market (ICM), voluntary or international carbon
markets, thereby creating a supplementary revenue stream for RVSFs—estimated at
approximately ₹2,000 per vehicle. To enable this, there is a critical need to develop
and ratify a robust, scientifically sound methodology
13
for quantifying emissions
avoided through ELV scrapping. Integrating RVSFs into the ICM and facilitating their
participation in the Voluntary Carbon Market (VCM) will enhance their economic
viability and enable the transmission of benefits to ELV owners in the form of more
competitive scrap valuations.
8.2 Vehicle Insurance as a Lever
Vehicle insurance can serve as a powerful instrument to incentivize the timely and
environmentally sound disposal of ELVs. Currently, ELVs, towards the end of their
useful life, remain uninsured and unfit for road use, owing to the absence of strict
enforcement of compulsory insurance of vehicles plying on road. As the vehicles
get older, the insurance premium must reflect the increased risk of accidents of the
vehicle beyond a certain age. Thus, increasing cost of ownership, say after 15 years
of vehicle life, would act as an incentive to scrap the vehicle in a timely manner.
Additionally, the absence of a structured pathway for integrating Total Loss Vehicles
(TLVs) into the ELV ecosystem creates a critical gap in inflow. Measures are required
to ensure that only roadworthy vehicles with valid insurance ply on roads, while
directing vehicle owners without proper documentation to scrap their ELV at RVSFs.
8.3 GST
The current taxation framework applicable to the formal ELV scrapping value chain
is marked by non-uniform GST rates across different stages— it ranged from 12%–
18%
14
on ELV procurement; it was 18% on the sale of metal scrap; and was 28% on
the resale of spare parts. With the announcement of the new GST slabs by the GST
Council, effective from 22 Sep 2025, the GST applicable on the above products would
still be falling into two non-uniform tax slabs – 5% and 18%. Most of the products
as mentioned above would fall under the 18% slab. In contrast, informal operators
face no comparable GST obligations, creating a cost disadvantage for RVSFs. A
13
A detailed methodology as prepared by Meta Materials Circular Markets (MMCM) is included in Annexure.
14
GST rate depends on engine capacity of ELV.
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 47
reduction in their GST rates would help promote parity and support formalisation.
Notably, the 54th GST Council meeting introduced the Reverse Charge Mechanism
(RCM) on the supply of metal scrap from unregistered dealers to registered recyclers.
The Reverse Charge Mechanism under GST shifts the liability to pay tax from the
supplier to the recipient of goods or services, instead of the seller collecting GST. It
is applied to specified goods and services, especially when the supplier is from the
unorganised sector, to improve tax compliance and widen the tax base. Extending
RCM provisions to ELV procurement could further prevent dual taxation on RVSFs.
While a uniform GST rate cut would require broader structural reform, targeted
rationalisation of rates for the ELV sector—especially for spare parts and scrap—
would significantly ease financial pressure on RVSFs and incentivise formal market
participation.
Key Action Points
Carbon Credits
BEE may undertake the following measure:
1)
Ratify methodology for generation of carbon credits from ELV for participation
in ICM and VCM.
Vehicle Insur
ance
MoRTH, in association with IRDAI (Insurance Regulatory and Development
Authority of India) may undertake the following measures:
1)
Insurance coverage may be subject to higher premiums in cases where vehicles are clearly ELVs.
2) Mandatorily require all TLVs declared by insurers to be transferred to RVSFs.
3)
May undertake consultations with insurance companies and enable system-
level integration with VAHAN.
4) Uninsured vehicles found plying on roads may face stringent penalties and
charged an amount equal to or a significant multiple of their insurance premium.
GST
MoRTH may represent to GST Council to undertake the following:
1)
Extend Reverse Charge Mechanism (RCM) to ELVs.
2) Revisit the GST rates on ELVs and the sale of scrap metal and spare parts
from ELVs.
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 48
9. Conclusion - Summary of Recommendations
As India advances towards a more resource-efficient and environmentally sound
mobility sector, the transition to a formal End-of-Life Vehicle (ELV) recycling
ecosystem presents both a pressing necessity and a transformative opportunity. This
report has identified key structural, regulatory, and market-related gaps in the current
framework, and outlined a comprehensive set of actionable recommendations aimed
at strengthening the circular economy of ELVs. Table 13 provides a consolidated
summary of these recommendations across policy, infrastructure, finance, awareness,
and compliance domains to enable coordinated and effective implementation by
relevant stakeholders.
Table 13: Summary of key recommendations and implementation agency
Recommendation Implementation Agency
Inadequate ATS Infrastructure and Testing Parameters
1) Utilise SASCI funds to adopt privately-owned vehicle testing facility model, in regions where the market potential
& ELV volume can support such
investments.
2) In states or union territories with limited vehicle population and no existing scrapping ecosystem, government-owned
infrastructure may be
developed.
3) ATS may be set up and operated in a district as per a particular model on the basis of its vehicle density.
4)
A goal of 1 ATS per district may be adopted.
5) Audit ATS operations and close down ATS generating spurious
fitness certificates and charging
non-government rates.
Timeline: Six months
State Governments
and MoRTH
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 49
Recommendation Implementation Agency
RVSFs – Setup and Informal Sector issues
1) Government-operated or PSU-led RVSFs may be established in
regions where private RVSFs not commercially viable to ensure
wider national coverage.
2) Modifications may be made in Motor Vehicles (Registration and
Functions of Vehicle Scrapping Facility) Rules, 2021 to:
a. Allow a single approval authority for RVSF set-up.
b. Establish a single certification authority for RVSF equipment.
Timeline: One y
ear
MoRTH,
CPCB,
SPCB
1)
Onboarding of identified informal vehicle scrapping clusters.
2) Part of SASCI may be dedicated to informal scrapper integration
with awareness campaigns and streamlined compliance support.
3) Udyam Assist Platform of the MoMSME may be utilised to help in onboarding of informal scrappers.
4)
One-time waiver of outstanding environmental liabilities to informal operators, enabling them to overcome initial compliance barriers.
5)
Establishment of common de-pollution facilities for smaller dismantlers operating within informal clusters to ensure environmental safeguards and cost-effective shared infrastructure.
6)
Inter-ministerial consultation by MoRTH involving NITI Aayog, MoEFCC and
MoMSME may be initiated to develop an action plan/
scheme for formalising the informal vehicle dismantling sector.
Timeline: One year
MoRTH,
CPCB,
SPCB
RVSFs – Bridging the Price Differential
1) Formation of a committee for formalising the spare parts business.
Timeline: T
hree months
MoRTH,
ACMA,
SIAM,
MHI
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 50
Recommendation
Implementation
Agency
1) EPR may be revised for retrospective targets as
well as increased prospectively in consideration
of increasing RVSF capacity and utilization and
increasing number of ELVs arriving in the market
in future.
2)
Inclusion of automobile production scrap as eligible for EPR to be revisited.
Timeline: T
wo years
MoEFCC
1)
The best-case CoD benefits model may be adopted
uniformly by all states.
Timeline: Six months
MoF
1) Quotation booklet for vehicle showroom price
may explicitly show discounts availed from CoD separately so that benefits are transmitted transparently.
Timeline: Six months
MoRTH, SIAM, OEMs
Simplifying Procedural Issues
1)
De-registration of vehicles at RTO shall only be permitted upon submission of CoD issued
by
RVSF, with certain exceptions.
2) Explore legal obligation on vehicle owners to initiate compulsory deregistration of ELVs to ensure responsible disposal and formal processing.
Timeline: One y
ear
MoRTH
VAHAN Upgradation
1)
Removal of old data from the database.
2) Introduce Aadhar-based ownership transfer and
penalty
accrual of vehicles on owner rather than
the vehicle.
3)
Integration of DPI into VAHAN portal.
4) Integration of ELV valuation module in VAHAN portal.
5)
Information dissemination/booking service for RVSF/ATS.
6)
Enhance scrap value discovery module on V-Scrap portal similar to Kelley Blue Book model.
Timeline: T
wo year
MoRTH
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 51
Recommendation
Implementation
Agency
Increasing Public Awareness about ELV Recycling Ecosystem
1) Adopt a detailed communication strategy to disseminate
information on vehicle scrapping.
Timeline: Six months
MoRTH,
OEMs,
RVSFs
1)
A list of RVSFs and ATS to be displayed on the website of all RTOs, central and state transport departments, RVSF and OEM websites.
Timeline: Six months
MoRTH, State
Transport
Departments,
OEMs, RVSFs
1)
Emphasize importance of de-registering ELV by owner in awareness campaigns.
2)
Promotion of vehicle scrapping on events such as Recycling Day, Upcycling Day, etc.
3)
Promotion of vehicle scrapping as a responsible practice during public outreach forums.
Timeline: Six months
MoRTH,
MoEFCC,
MHI
Other Int
erventions
1)
Ratify methodology for generation of carbon credits from ELV for participation
in Indian Carbon Market (ICM) and Voluntary
Carbon Market (VCM).
Timeline: One year
BEE
1) Insurance coverage may be subject to higher premiums in
cases of ELVs, or not having valid fitness certificate.
2) Mandatorily require all Total Loss Vehicles (TLVs) declared by insurers to be transferred to RVSFs.
3)
Uninsured vehicles on roads may face stringent penalties.
Timeline: One y
ear
IRDAI,
MoRTH
1)
Extend Reverse Charge Mechanism (RCM) to ELVs.
2) Revisit the GST rates in ELV sector for reduction.
Timeline: One t
o two years
MoRTH
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 52
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 53
10. Annexure
A. Number of Vehicles coming in for Testing at ATS
Figure 20: Number of Vehicles to be Tested and Total ATS Testing Capacity
The national requirement for vehicle fitness testing at ATS is determined by
separately aggregating the projected volumes of both non-transport and transport
vehicles due for testing in a given compliance year based on VAHAN registration
data, following the norms for fitness testing of vehicles by category as laid down by
MoRTH. For non-transport vehicles, a share of vehicles registered 15 years (lower
share) and 20 years (higher share) prior to the compliance year are considered.
For transport vehicles, a combination of two components is considered: a smaller
share of the fleet aged 9 to 15 years, and a larger share of the fleet aged 2, 4, 6, and
8 years (as per the fitness testing norms for transport vehicles). The percentages
here serve as discount factors to adjust for the loss of vehicles due to ageing,
accidents, informal scrapping, and other attrition factors; and their magnitude
is adjusted as per the age and category of the vehicles to be tested. The total
testing requirement is then obtained by summing the estimated volumes for both
categories.
The number of vehicles that can be tested given current ATS capacity is calculated
using ATS data from the AFMS portal and provided by MoRTH, with the assumption
that each ATS has an annual average testing capacity of 30,000; being a 2-lane
ATS operating 300 days in a year testing 100 vehicles a day.
The total number of vehicles requiring testing is matched against the current and
prospective declared operational ATS capacity to identify a potential capacity gap
in vehicle fitness testing infrastructure.
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 54
B. State-wise ATS Requirement Estimate
Table B1: State-wise estimate of required ATS
S.No. State Name
Estimated
Vehicle
testing
Population
No of
RTOs
Estimated
Requirement
of ATS
Current
no. of
ATS
Gap
Union Territories
1
Andaman &
Nicobar
6742 5 1 0 1
2 Chandigarh 41443 1 1 0 1
3
Dadar & Nagar
Haveli and
Daman & Diu
18052 3 1 1 0
4 Delhi 447055 16 15 1 14
5 Ladakh 3407 3 1 0 1
6 Lakshadweep 608 6 1 0 1
7 Pondicherry 47947 8 2 0 2
States
8 Andhra Pradesh 601720 83 20 18 2
9
Arunachal
Pradesh
14572 29 1 0 1
10 Assam 272005 33 9 5 4
11 Bihar 412735 48 14 8 6
12 Chhattisgarh 278317 31 9 8 1
13 Goa 54298 13 2 0 2
14 Gujarat 963655 37 32 56 0
15 Haryana 570336 98 19 1 18
16
Himachal
Pradesh
90244 96 3 4 0
17
Jammu And
Kashmir
95032 21 3 1 2
18 Jharkhand 262821 25 9 1 8
19 Karnataka 1004329 68 33 3 30
20 Kerala 578855 87 19 4 15
21 Madhya Pradesh 661635 53 22 12 10
22 Maharashtra 1609545 59 54 0 54
23 Manipur 15990 13 1 0 1
24 Meghalaya 30906 15 1 0 1
25 Mizoram 16975 10 1 0 1
26 Nagaland 47755 9 2 0 2
27 Odisha 383692 39 13 1 12
28 Punjab 409394 96 14 0 14
29 Rajasthan 683133 59 23 2 21
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 55
S.No. State Name
Estimated
Vehicle
testing
Population
No of
RTOs
Estimated
Requirement
of ATS
Current
no. of
ATS
Gap
30 Sikkim 7998 9 1 0 1
31 Tamil Nadu 1202190 88 40 0 40
32 Tripura 29450 9 1 0 1
33 Uttar Pradesh 1627332 21 54 11 43
34 Uttarakhand 147448 77 5 7 0
35 West Bengal 476077 59 16 0 16
36 India (Total) 13113694 - 441 156 285
C. Districts in each State covered by ATS
Table C1:State-wise Districts covered by ATS
S. No State
No of
districts
No of districts
not covered by
ATS
No of districts
covered by ATS
1
Andaman And
Nicobar Islands
3 3 0
2 Chandigarh 1 1 0
3
Dadra & Nagar
Haveli
3 1 2
4 Daman & Diu 2 2 0
5 Delhi 11 9 2
6 Ladakh 2 1 1
7 Lakshadweep 1 1 0
8 Puducherry 4 2 2
9 Andhra Pradesh 13 7 6
10 Arunachal Pradesh 25 22 3
11 Assam 34 28 6
12 Bihar 38 32 6
13 Chhattisgarh 33 25 8
14 Goa 2 2 0
15 Gujarat 33 17 16
16 Haryana 22 20 2
17 Himachal Pradesh 12 7 5
18
Jammu And
Kashmir
20 20 0
19 Jharkhand 24 21 3
20 Karnataka 31 26 5
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 56
S. No State
No of
districts
No of districts
not covered by
ATS
No of districts
covered by ATS
21 Kerala 14 8 6
22 Madhya Pradesh 55 48 7
23 Maharashtra 36 33 3
24 Manipur 16 14 2
25 Meghalaya 11 7 4
26 Mizoram 11 11 0
27 Nagaland 17 13 4
28 Odisha 30 29 1
29 Punjab 23 22 1
30 Rajasthan 41 37 4
31 Sikkim 6 6 0
32 Tamil Nadu 38 28 10
33 Telangana 33 29 4
34 Tripura 8 5 3
35 Uttar Pradesh 75 64 11
36 Uttarakhand 13 8 5
37 West Bengal 23 22 1
D. State-wise RVSF Requirement Estimate
Table D1: State-wise estimate of required RVSF
S.No. State Name
Estimated
Vehicle
scrapping
population
Requirement
of RVSF
No. of RVSF Gap
Union Territories
1 Andaman And Nicobar 2464 1 0 1
2 Chandigarh 15307 1 1 0
3
Dadar & Nagar Haveli
and Daman & Diu
6777 1 0 1
4 Delhi 232462 6 1 5
5 Ladakh 758 1 1 0
6 Lakshadweep 369 1 0 1
7 Pondicherry 24164 1 0 1
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 57
S.No. State Name
Estimated
Vehicle
scrapping
population
Requirement
of RVSF
No. of RVSF Gap
States
8 Andhra Pradesh 239560 9 7 2
9 Arunachal Pradesh 2519 1 0 1
10 Assam 40757 3 5 0
11 Bihar 35243 4 5 0
12 Chhattisgarh 75981 4 6 0
13 Goa 19104 1 1 0
14 Gujarat 264431 16 9 7
15 Haryana 203041 11 22 0
16 Himachal Pradesh 31671 3 2 1
17 Jammu And Kashmir 22016 2 0 2
18 Jharkhand 97814 4 0 4
19 Karnataka 503324 18 2 16
20 Kerala 311521 12 0 12
21 Madhya Pradesh 288949 10 7 3
22 Maharashtra 371540 26 9 17
23 Manipur 10430 1 0 1
24 Meghalaya 10868 1 0 1
25 Mizoram 4462 1 0 1
26 Nagaland 11445 3 0 3
27 Odisha 136566 6 2 4
28 Punjab 187383 9 5 4
29 Rajasthan 192639 13 3 10
30 Sikkim 1524 1 0 1
31 Tamil Nadu 461310 23 0 23
32 Tripura 8283 1 0 1
33 Uttar Pradesh 540017 17 82 0
34 Uttarakhand 44348 2 5 0
35 West Bengal 161970 11 2 9
36 India (Total) 4561017 227 178 49
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 58
E. Impact of Suggested EPR Revisions vs. Current EPR Regime
Figure 21: Total RVSF Scrapping Capacity and Steel Recovery from EPR Targets
(Current and Revised)
Figure 21 compares the projected EPR steel targets as per the Environment
Protection (End-of-Life Vehicle) Rules, 2025 (MoEFCC) with the current and
approved RVSF steel processing capacity from 2026 to 2040. It shows both
the original and (proposed) revised EPR targets (see Table 8), highlighting
the significant increases in (proposed) revised targets remain within available
approved RVSF capacity.
The methodology estimates India’s total steel scrapping capacity from operational
and planned RVSFs based on average vehicle weight, steel content, and annual
processing capacity per facility. Using VAHAN data on vehicle registrations, the
total steel content from ELVs is calculated for both transport and non-transport
categories, considering their respective registration ages. The steel recovered under
the current EPR regime is then determined by applying the existing steel recovery
targets set by MoEFCC. Finally, a revised scenario is modelled by increasing these
recovery targets in future years, allowing for a comparative assessment of steel
recovery potential against available RVSF capacity, as reflected in the graph. The
analysis demonstrates that, this increase in EPR targets would be feasible as and
when the total approved RVSF capacity utilisation as per MoRTH data is realized.
F. Price Range of Materials from a Recycled Car
Table F1: Price Range of Materials
S.No. Spare part Average Life
Approximate*
Price range
1 Car tires 4-5 years 500-1000
2 Car battery 2-3 years 500 - 1500
3 Car air filter 19000 km – 25000 km 100-200
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 59
S.No. Spare part Average Life
Approximate*
Price range
4 Synchronizer belt 100000 km to 160000 km 100-300
5
Radiator cooling
system
150000 km 1500-2500
6 Steering wheel oil 3-5 years
7 AC compressor 12-15 years 2000-4000
8 Rubber car wipers 12 months to 24 months 100-300
9 Oil filter
5000 km – 15000 km
depending on the type of oil
100-150
10
Brakes (brake
callipers, wheel
cylinder, and the
master cylinder)
50000 km to 65000 km 1000-2000
11 Spark plugs 30000 km – 50000 km 75 - 100
12
Thermostat Water
Body Elbow
Ten years 500 - 750
13 Alternator 7 years 5000-7000
14 Shocks and struts 100000 km 750 - 1500
15
Starter Starter
Motor Assembly
Parts
100000 km 2000 - 2500
16
Headlights and
taillights
7 to 10 years
17
Windshield wiper
blades
1 to 3 years 150 - 300
18 Clutch Kit Parts 12 to 15 years 1500 - 2000
19 Fuel pump 7 to 10 years 4000-6000
20 Water pump 10 to 12 years 1000 - 1500
21
Engine sensors
Lambda Control
Sensors
10 years and more 1500 - 2000
22 Muffler 10 years and more 2000 - 2500
23 Engine block 15 to 20 years 8000 - 10000
24 Serpentine belt 5 years 100 - 150
25 Camshaft 10 to 15 years 1000 - 1500
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 60
S.No. Spare part Average Life
Approximate*
Price range
26
Piston and
Connecting Rod
Assemblies
8 to 10 years 2000 - 4000
27 Catalytic convertor 15 years 2000 - 6000
28
Starting and
Charging System
10 to 12 years
29
Starter Motor
Assembly Parts
8 to 10 years 1500 - 2500
30 Throttle Body 5 to 8 years 1000 - 1500
31 Intake Manifold 12 to 15 years 1500 - 2000
*Prices are approximated based on a market survey.
G. CoD Concessions Across States
Table G1: CoD Concessions Across States
S. No State
Concession
for Transport
Vehicles
Concession
for Non-
Transport
Vehicles
Notes
1 Himachal Pradesh
15% of
registration
tax
25% of
registration
tax
2 Goa
3 Mizoram
4 Uttarakhand
Uttarakhand: INR 50,000 cap
5 Puducherry
Puducherry: 11,000 cap for 4W
6 Rajasthan
7 Jharkhand
8 Madhya Pradesh
9 Bihar
10 Kerala
Kerala: Offer valid for 1 year after CoD issued
11 Chhattisgarh
12 Punjab
13 Odisha
14 Assam
15 Karnataka
16
Dadra & Nagar Haveli and Daman & Diu
ENHANCING CIRCULAR ECONOMY OF END-OF-LIFE VEHICLES (ELVS) IN INDIA 61
S. No State
Concession
for Transport
Vehicles
Concession
for Non-
Transport
Vehicles
Notes
17 Maharashtra
10% of
registration
tax
10% of
registration
tax
Scheme expires in
3 years
18 Uttar Pradesh
10% of
registration
tax
15% of
registration
tax
19 Haryana
•
Exempts 10% of tax, OR
• 50% of scrap value, whichever is less
20 Gujarat
•
Transport vehicles: 15%*Vehicle sale price *Multiplying factor as per vehicle type
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Transport vehicles: 25%* Vehicle sale price *Multiplying factor as per vehicle type
Complex notification
15
E.g. LMV: Sale price of INR 10 lakh or less is multiplied by a factor of 6% and then the MV tax concession percentage depending on vehicle category (Transport/Non- Transport)
15
https://morth.nic.in/sites/default/files/Gujarat_MV%20Tax.pdf