India’s proposed old automobile scrapping policy holds the potential to generate an estimated 12.85 million mt per year of shredded scrap, and offset the country’s current shredded scrap imports of 6 million mt per year, a Ministry of Steel official said on Thursday, June 9, citing a report prepared by the Indian government.
The ministry official said that the replacement of imported scrap by old automobile scrap in steel production will lead to a foreign exchange saving in the range of $2.5 billion to $3.6 billion at current import price levels of shredded scrap.
However, the official acknowledged that the report has not laid down any time period over which optimal scrap generation and foreign exchange savings will be achieved once the scrapping policy for old automobiles comes into play.
India currently does not have any policy governing the scrapping of old passenger and commercial vehicles and buyers of new vehicles receive no financial incentives for scrapping older ones.