Indian government mulls to make Kandla port a base for old vehicle imports as part of its strategy to streamline domestic scrap collection and processing industry. India’s long-waited vehicle scrappage policy is in its final stages and expected to be implemented in a month’s time, said Nitin Gadkari, Union Minister for Transport at Auto Expo 2020.
Old vehicle imports for recycling will reduce India’s dependence on metal imports. The government aims to increase the availability of scrap for the domestic metal industry through the new vehicle scrappage policy. According to the policy, vehicles older than 15 years should not be re-registered and must be scrapped at the authorised collection centres.
Vehicle owners will be provided incentive and certificate for submission of older vehicles, which they can redeem for new vehicle purchases. Many automakers including Mahindra and Toyota-Suzuki have taken initiatives to developed recycling centres across the country. Around 30mn old vehicles are running on the Indian roads that need to be discarded by April 2020. These vehicles were manufactured before March 31, 2005 and are at the end of their lifespan. Implementation of scrappage policy is expected to lower new vehicle prices and increase auto demand.
India’s domestic scrap demand is estimated to be around 32-35mn mt out of that around 25mn mt of steel scrap comes from domestic unorganized industry. The government aims to reduce the gap of 6-7mn mt of scrap, both ferrous and non-ferrous, that is being filled by the imports costing Rs24,500 crore.
Industry inputs
Secondary aluminium producers and the stainless steel industry are upbeat about the End-of-life vehicle (ELV) policy.
Century Metal Recycling, the largest aluminium recycler in India, supported the upcoming ELV recycling policy and hailed it as a growth opportunity for the secondary aluminium industry. The entry of big players such as Tata and Mahindra into auto recycling indicates the scope of opportunity, said Akshay Agarwal, Executive Director, Century Metal Recycling.
Bhartendu Gupta of Jindal Stainless said government support is needed in the form of a reduction in import duties on ELVs and subsidised loans to recyclers to help build inventories.
Himanshu Bindal, CEO of Bindal Group drove attention to the issue of lack of domestic feedstock and the need to import ELVs to keep shredders operational.