Vehicle Scrappage Policy Has The Potential To Make India Global Manufacturing Hub

General (Dr) Vijay Kumar Singh, Honourable Minister of State for Road Transport and Highways & Civil Aviation was present as Chief Guest. Shri Paresh Kumar Goel, Director, Ministry of Road Transport & Highways was one of the esteemed guests present for the event.

Vehicle Scrappage Policy Has The Potential To Make India Global Manufacturing Hub

The Policy Times in association with the Material Recycling Association of India (MRAI) & MONO STEEL organized National Conference on Roadmap for India’s Sustainable Mobility in light of India’s introduction of the recent Vehicle Scrappage Policy 2021 from 4 pm-8.30 pm (IST) on Friday, 24th  September 2021 through ZOOM.

Link To The Online Conference

The Conference intended to engage stakeholders from various levels from policymakers, auto manufacturers, OEMs to corporate leaders for further clarification and deliberation on the implementation of the vision presented by the Vehicle Scrappage Policy. 500+ different stakeholders including industry representatives from different sectors were present for the occasion. General (Dr) Vijay Kumar Singh, Honourable Minister of State for Road Transport and Highways & Civil Aviation was present as Chief Guest. Shri Paresh Kumar Goel, Director, Ministry of Road Transport & Highways was one of the esteemed guests present for the event.

The Conference was divided into 3 parts, the first part being the Inaugural Ceremony and the second part was divided into two plenary sessions. The Second Plenary Session was under the theme ‘Policy Impact on Automobile Stakeholders, Related Industry & Environment’ and was chaired by  Mr. Akhilesh Srivastava, Global Expert New Mobility & Tech-driven Road Safety 2.0 who has been one of the crucial contributors to the formation of this policy. Speaking in this context Mr. Srivastava gave the background of the performance of vehicle scrappage policy in developed countries like the UK and the USA. Both the countries witnessed the massive success of the policy due to its incentivized and profit-based nature. It is expected to perform really well in India depending on its circulation and implementation. The whole system needs to be transparent, automatic and with minimum human interference to inspire voluntary participation from different stakeholders including common people. The performance of this policy also depends on the skill, competency of the stakeholders in the ecosystem, and sustainability of the digital platform interconnecting the whole process, people, and tracking the performance. As of now a big scale scrapping center in Greater Noida and another 5 big scrapping centers are in various stages of completion, however considering the geography of the nation more scraping centers and testing centers should come to better implementation of the policy.

Shubika Sardana, Associate, Kearney brought out a lot of behind-the-scenes elements for this policy and the roles of roles, relevance, and rationale for each stakeholder to join the auto scrappage industry from the common people, auto industry to OEMs, etc. The incentivized benefits to scrap old cars and the disincentives and economic burden of using old cars have been proven very clearly in the policy.

Mr. Amar Singh, Secretary-General, MRAI – “ India’s import dependency on raw material is a negative burden on the business community as well as added shipping and logistic costs reducing the profit. The vehicle scrappage policy is going to localize the resource for raw material reducing logistics cost significantly. Firstly for the RVSFs to produce such secondary raw materials it is imperative that their source for scrap is continuous even if it is imported otherwise both RVSFsand the dependents will suffer from the irregularity. This policy will also require adaptation of foreign technology and a tax waiver for these will work wonders for the community.

Mr. Arindam Lahiri, CEO, Automotive Skills Development Council taking into account of the dramatic shift in the automobile industry for quite a few reasons including technology, policy intervention and shift to different fuel sources, etc skill requirement has been changing accordingly. The policy intervention in discussion is envisioned to herald a transformative and sustainable change in the area but that vision could only be realized with skilled people. This also has huge provisions for quite a substantial amount of automated processes into it and it is crucial that properly trained and licensed people go behind the wheels to drive the automated systems. Indian auto scrappage sector is largely manual and designing a comprehensive skill development model accounting to the shift and changes is necessary to feed the kind of skilled individual the policy implementation will require. Another part is making the workspace as attractive as other contemporary attractive work fields to invite greater participation from youngsters through strategic measures like early industry exposure.

Mr. Ashish Bhagra, COO, CERO-Mahindra MSTC Recycling Pvt Ltd- India Imported 6.7 million tonnes of Ferrous Scrap in 2018-19 and 4.6 million tonnes of Ferrous Scrap in 2019-20. On the other hand, India as a growing country will become one of the top largest car markets with increasing car ownership and almost 22 million obsolete cars by 2025. The Vehicle Scrappage policy on one hand can mitigate the dependency on import amongst many other positive results. However for that to be true there is a need for large numbers of scrap yards. There are quite a few unclear issues and the yet-to-be-defined status of Registered Vehicle Scrapping Facility (RVSF) is one of them and it is imperative to define their industry for them to get the umbrella of incentives and protection to survive initially. Secondly, there is no clear guidance on the cancellation of vehicles rules which is entrusted to state RTOs and every RTOs work differently proving to be a systematic hazard for their work process. Lastly, the guidance on the auction of End Life vehicles has to be made clear for  RVSFs to function clearly.

Mr. Kanakasabapathi Subramanian, Sr. Vice President, Ashok Leyland presented an intriguing analysis of the current transport sector and the huge transition it is going to face. It is imperative to calculate and quantify the impact of each step of the process for it to measure and compare with the gain and loss as we start. The scrapping will have positive environmental and economic benefits but that is not without a negative cost. For example, the RVSFs or scrap yards are going to negatively impact the environment too. It is crucial to have a pre-designed segment of guidance to tackle the negative thread before it brings a chain reaction that is tough to tackle.

Mr. Sameer Malhotra, Director &CEO, Shriram Automall India Ltd (SAMIL) coming from a sector that is going to majorly face the disruption of the policy welcomed the change and positive transformation the policy is going to face from formalizing the sector, generating huge investment, revenue, and employment all the whale bridging the import gap in the country and providing an array of opportunities for car resellers in the ecosystem as per their survey this will generate demand for both used and unused cars.

Mr. Sushil Ramdasi, Deputy Director, Automotive Research Association of India (ARAI) focusing more on sustainable mobility and the potential roadmap towards it. ICE or fuel engine has been updated in the past decade or so rapidly to meet the international carbon emission standard. However, we have reached a saturation point where it is better to switch strategy to slowly infiltrate alternative greener technology or fuel to let the existing ecosystem adapt to the change and low cost, affordable technology availability, and acceptance from the people for mass penetration.

Mr. Debartha Banerjee, Co-Founder, Sampurn(e)arth Recycler representing the plastic waste management sector brought out the loopholes in plastic policy to be a bridge in the scrappage policy first being the standardization of informal sector or training them to integrate into the ecosystem to be created by the scrapping policy as they play a huge role in the collection, segregation of components of different category and for large scale RVSFs to be present in enough number it is going to take time. Secondly recyclability and reusability of plastic components used in cars for the scrap plastic as without defining that the policy will not achieve its purpose. Lastly defining accountability and roles of different statutory authorities for better regulation, implementation, compliance by stakeholders.

The Third Plenary Session of the conference was under the theme ‘Policy Opportunities, Circularity and Implementation Issues.’ The esteemed speaker brought out some excellent issues to be considered.

Shri Kiritbhai M. Soni, President, Saurashtra Chambers of commerce & Industries Bhavnagar reiterated the importance of implementation deciding the success of the policy. Vehicle Scrappage Policy is going to be the main source of raw material for India for many resources including steel as its per capita consumption doubled in the last decade. However, the government should focus on the import of scraps or secondary materials also to fuel the drive of RVSFs.

Mr. Haresh Parmer, Honorary Secretary, Ship Recycling Industries Association highlighted a major point to build a profit-centric ecosystem around the policy. For Example, prior to introducing the international standard for recycling in Bhavnagar, they used to recycle 300+ ships which have reduced significantly after the adaptation. In the case of scrappage policy as well, various environmental norms and safety policies are also going to reduce the cost to value ratio and concentrate focus to bridge that, like tax rebate for waste value industry is necessary to give a boost to the business community.

Mr. Vikrantt Mohan, President, All India Automobile Workshops Association- “ Today’s automobiles are highly technologically advanced, digitized and scrapping is not the only option. For example, a car can be refitted or refabricated according to its condition. The concern is what is the process after the car is scrapped and recycled to the highest value to be reutilized. There is also that what is to be done for the parts that can not be recycled. The step-by-step process needs to be defined very clearly”.

The Think Tank Partner for this National Conference was GRC India and the Association Partners were All India Motor Transport Congress(AIMTC), Saurashtra Chamber of Commerce & Industries Bhavnagar, Society of Indian Automobile Manufacturers (SIAM), All India Motor Transport Congress (AIMTC), All India Automobile Workshops Association and Ship Recycling Industries Association.

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Vehicle Scrappage Policy Has The Potential To Make India Global Manufacturing Hub
General (Dr) Vijay Kumar Singh, Honourable Minister of State for Road Transport and Highways & Civil Aviation was present as Chief Guest. Shri Paresh Kumar Goel, Director, Ministry of Road Transport & Highways was one of the esteemed guests present for the event.
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