Nitin Gadkari Outlines Plan to Transform India’s Auto Industry: Vehicle Scrapping and Ethanol Integration

Union Minister Nitin Gadkari has put forth a strategic plan to revolutionize India’s automotive sector, focusing on vehicle scrapping and increased ethanol usage. The plan centers on the potential of scrapping 97 lakh outdated and polluting vehicles, which could generate 40,000 crore rupees in GST revenue and create 70 lakh employment opportunities. Speaking at the ACMA annual meeting, Gadkari also outlined the aim of positioning India as the leading automobile industry globally within the next five years. Presently, the rate of vehicle scrapping remains modest, with only 3 lakh vehicles scrapped by August 2025. Gadkari called upon automobile manufacturers to encourage scrapping by offering a minimum 5% discount to customers presenting scrapping certificates during new vehicle purchases. The Vehicle Scrapping Policy, also known as the Voluntary Vehicle Fleet Modernization Program (V-VMP), is designed to phase out old, unsafe, and polluting vehicles in an environmentally conscious manner. Gadkari emphasized that the scrapping policy could lead to a 25% reduction in the cost of automotive components through the integration of recycled materials. Moreover, the removal of 97 lakh unfit vehicles is expected to reduce emissions, improve fuel efficiency, and enhance road safety. Gadkari highlighted India’s ambitious goal to become a global leader in the automotive industry. He also pointed out the substantial cost of fuel imports, which amounts to 22 lakh crore rupees annually, and advocated for expanding ethanol production by diversifying agriculture. India is currently moving from E20 to E27 fuel blends. Gadkari connected fuel policy, vehicle scrapping, and safety under the umbrella of national security. The Automotive Research Association of India (ARAI) is currently evaluating the suitability of E27 fuel. Gadkari believes that the promotion of scrapping initiatives, along with the adoption of ethanol, could dramatically reshape India’s automotive economy, decrease pollution, and promote energy self-reliance.