India’s scrapping of end-of-life vehicles (ELVs) is floundering, with only three percent of eligible vehicles scrapped during the 2022-25 period, according to NITI Aayog, a government policy advisory body on Tuesday, June 16.
According to the body, during the period an estimated 12 million automobiles were categorized as ELV but only 350,000 units were scrapped at registered vehicle scrapping facilities.
For a country of India’s automotive scale, this is not a marginal implementation issue. It is a structural challenge for the entire ELV value chain, NITI Aayog said.
India’s ELV stock is expected to rise from around 23 million vehicles in 2025 to nearly 50 million by 2030. This growth represents a major environmental concern, particularly where older, higher-emitting vehicles remain in circulation or are dismantled outside regulated systems. But it also represents a significant resource opportunity for steel, aluminium, copper, plastics, reusable parts and future battery-related materials. The problem is that policy intent and market behaviour are not yet aligned, the advisory body said.
It stated that India’s formal recycling infrastructure remains limited and there are gaps in both Automated Testing Stations and Registered Vehicle Scrapping Facilities, with facilities unevenly distributed across the country.
For vehicle owners, access matters and, if the authorised route is distant, slow or poorly understood, the informal route becomes the easier option. Price is another decisive factor. Informal dismantlers can often offer more for vehicles because they operate with lower compliance costs, limited environmental safeguards and fewer tax or documentation obligations.
For the owner of an old car or commercial vehicle, the choice may be simple: accept the higher immediate payment from an informal buyer or navigate a formal system that may be better for the environment but less financially attractive. That is the central challenge. A circular economy cannot be built on regulation alone. It has to work commercially for the recycler, the vehicle owner, the original equipment manufacturer (OEM) and the downstream material market, NITI Aayog added.