Reduced import cost with increased recycling
The phased-out old and unfit vehicles will create a huge amount of materials eligible for recycling. Using that recycled material will help in reducing the prices of the new vehicles as the production cost will be reduced because of lesser dependency on imported material. This will save the auto companies and component manufacturers would be able to save production costs for their products.
The Indian auto industry currently generates ₹1.45 lakh crore revenue from exports. Post-implementation of the scrappage policy, this figure could increase to around ₹3 lakh crore. Raw materials used in manufacturing automobiles would see a significant drop in their prices. These include such as steel, plastic, rubber, aluminium, etc.