India’s scrap policy: A fair game or another conundrum for the automobile sector?

It is better late than never… this maxim aptly describes India’s scrappage policy. After much delay and brainstorming, the Indian government formulated this policy to scrap out old and unfit vehicles, finally joining the list of those nations that already have a scrapping policy.

While India Inc. is quite content with the announcement, the decision is laudable for many reasons.

First of all, after the successful implementation of BSVI, the scrappage policy is expected to be a win-win situation for all, as various sections of the industry and think tanks are already predicting. The automotive sector which has been in a slump for so long, anticipates that the beneficiaries of this policy will range from entire OEMs to the aftermarket segment. With this policy in place, experts foresee an upswing in new vehicle sales, leading to improved revenue and growth of the automotive market. Given this, the overall turnover of the industry can reach to Rs 10 lakh crore from the existing Rs 4.5 lakh crore as per CARE Ratings.

The full article was originally published on SME Futures