This could help in car price reduction. Read what Nitin Gadkari has to say

Union minister for road transport and highways Nitin Gadkari has said that increased metal recycling in India could bring down the cost of auto components by a substantial 30 per cent in India, reports PTI. This could automatically help in the reduction of vehicle production costs in the country, allowing auto manufacturers to offer vehicles at reduced pricing. The minister has said that the central government has set a target of doubling the size of the automobile sector to ₹15 lakh crore. However, he didn't give any timeline for achieving that target.

Interestingly, Gadkari's comment at a time when India overtook Japan to become the world's third-largest automobile market in 2022. The growth is expected to be fast-paced in the coming days. Besides the increased sales, the Indian automobile industry is also poised to grow in terms of manufacturing capacity. The Vehicle Scrappage Policy announced by the central government is expected to help in that process.

The Vehicle Scrappage Policy is expected to boost metal recycling in the country, with the metals from old vehicles being recycled and used in new vehicles. This would not only help the automakers with increased availability of metal for a higher number of vehicle production but also help in the reduction of production costs with cheaper metal availability.

The report claims that Gadkari has noted that India faces shortages in key raw materials for the automobile industry, which include important metals such as copper, aluminium and steel. He also encourages the metal recycling industry to get into joint ventures with foreign companies in a bid to scale up the industry volume. "We need to encourage recycling of material to reduce the cost of the finished product, and we will make more export, and that is the reason that the government is propagating the vehicles scraping policy. Increased scrapping can reduce the cost of auto components by as much as 30 per cent," Gadkari said, adding that in the next financial year, around nine lakh government vehicles will be scrapped.

The minister also appealed to the automobile manufacturers in India to set up large vehicle scrapping units and offered them concessions at the forthcoming new dry ports in Wardha, Sangli and Kolhapur in Maharashtra. He further stated that importing more waste tyres, waste plastics, auto parts, and automobile units can add more value on one hand and on the other the cost of automobile components can come down by 30 per cent. He further reiterated that to increase more recycling, the government would set up scrapping units in every district across the country.