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India’s automotive landscape is at a turning point. With millions of vehicles reaching the end of their economic life, the government’s Vehicle Scrappage Policy (2021) has transformed what was once a fragmented, informal trade into a structured, compliance-driven recycling industry.
Imagine a dusty yard in Faridabad that once manually dismantled rusted cars. Today, that same space—rebuilt under the Registered Vehicle Scrapping Facility (RVSF) rules—operates cranes, depollution rigs, and AI-based material tracking, ensuring every kilogram of metal, plastic, and rubber re-enters India’s circular economy.
This blog, crafted by Green Permits, walks you through the entire process—from regulatory frameworks to on-ground execution—to help you establish a compliant, profitable, and sustainable vehicle scrapping plant in India.
The Ministry of Road Transport and Highways (MoRTH) issued GSR 653(E) in 2021, formalizing the Motor Vehicles (Registration and Functions of Vehicle Scrapping Facility) Rules, 2021.
These rules are the backbone of India’s scrappage ecosystem and lay down:
Each RVSF is authorized to scrap end-of-life vehicles (ELVs) that meet one of the following conditions:
According to PIB data (July 2024), over 96,980 vehicles had already been officially scrapped across India—an encouraging sign for early investors.
MoRTH and state transport departments now require all government departments and PSUs to scrap obsolete fleet vehicles only through registered RVSFs. This creates steady demand.
States like Odisha, Tamil Nadu, and Maharashtra have recognized RVSFs as industrial units, making them eligible for land allocation and MSME benefits.
Each scrapped vehicle releases up to 70–75 % recyclable materials—steel, aluminum, copper, plastic—which feed steel mills and foundries at lower carbon costs.
Licensing and operations are handled via the National Single Window System (NSWS), which connects MoRTH, SPCBs, and state industries departments in one workflow.
| Stage | Description / Approvals Required | Key Authority |
|---|---|---|
| 1. Project Concept & Feasibility | Market analysis of ELV availability, logistics mapping, and profitability study. | Private consultant / Green Permits |
| 2. Site Selection & Land Use Approval | Industrial zoning or conversion of non-agricultural land; minimum 5–10 acres for medium RVSF. | State Industries Dept / Industrial Dev Corp |
| 3. Apply for Consent to Establish (CTE) | Under the Air & Water Acts; includes pollution control and stormwater plan. | State Pollution Control Board (SPCB) |
| 4. RVSF Registration (Application Form-1) | File online via NSWS.gov.in → MoRTH → “Vehicle Scrapping Facility.” Attach land deeds, layout, CTE, and company KYC. | MoRTH / State Transport Dept |
| 5. Consent to Operate (CTO) | After plant construction, apply for CTO with pollution monitoring devices in place. | SPCB |
| 6. Inspection & Verification | Physical or virtual inspection by MoRTH/SPCB teams to confirm compliance with GSR 653(E). | MoRTH / SPCB |
| 7. Issue of RVSF Certificate | Five-year valid license granted through the portal; renewable thereafter. | MoRTH |
| Facility Component | Requirement as per MoRTH RVSF Rules |
|---|---|
| Depollution Zone | Must include systems for fuel, oil, coolant, and AC gas recovery. |
| Dismantling Zone | Use mechanized tools for battery, engine, tyre removal; avoid manual cutting. |
| Hazardous Waste Storage | Secure storage with SPCB authorization for fluids, batteries, and filters. |
| Material Segregation | Segregate metals, plastics, rubber, glass; record weights digitally. |
| Weighbridge & CCTV | Mandatory for incoming/outgoing vehicles and real-time feed to transport portal. |
| IT System Integration | Data link with Vahan for vehicle de-registration and certificate issuance. |
| Safety & Fire Measures | Fire hydrants, PPE, safety training records to be maintained. |
| Category | Estimated Fee/Cost (INR) | Remarks |
|---|---|---|
| MoRTH Registration Fee | ₹15,000 (one-time valid 5 years) | Mirrors e-waste recycler pattern under CPCB rules. |
| CTE + CTO Processing Fees | ₹50,000 – ₹1 lakh (state-wise) | Air/Water Act compliance. |
| Land & Civil Infra Setup | ₹2 – 5 crore (10 acres avg.) | Includes sheds, de-pollution zone, roads. |
| Machinery & Equipment | ₹1 – 3 crore | Shredders, cranes, cutting machines, compressors. |
| Annual Maintenance Charges | ₹5,000 / yr | For portal upkeep and renewal. |
| Manpower & Training | ₹15 – 25 lakh per year | Operators and safety officers. |
(Costs vary by state and scale; Green Permits helps prepare a bankable DPR with CPCB compliance.)
| State | Key Incentive/Policy Highlights |
|---|---|
| Odisha | Classifies RVSFs as industrial units; project to start within 3 yrs (MSME) or 5 yrs (large). |
| Tamil Nadu | Offers single-window clearance through TNPCB and Industries Dept; stamp-duty exemption on land. |
| Maharashtra | Waiver of registration charges for first 5 yrs and power tariff rebate for recycling facilities. |
| Gujarat | Scrap yards notified under GIDC industrial zones; priority land allotment. |
| Uttar Pradesh | Vehicle Scrappage Policy 2023 promotes ELV clusters near Kanpur, Lucknow, and G.Noida. |
Vehicle scrapping is not just a business—it’s a pollution-prevention mission.
Under the Air (Prevention and Control of Pollution) Act, 1981 and the Hazardous Waste Rules (2016), an RVSF must:
Green Permits prepares the required Self-Declarations and Digital Checklists modeled on CPCB EPR formats .
Tata Motors in collaboration with GSTC set up an RVSF spanning 10 acres, capable of scrapping 21,000 ELVs annually. The plant features a dedicated depollution line and segregation zones for steel, aluminum, and plastic. This facility serves as a benchmark for technology and sustainability.
In 2023, the Odisha Transport Department issued a directive mandating the disposal of government vehicles older than 15 years through registered RVSFs. This created steady demand and prompted local entrepreneurs to invest in recycling plants near Bhubaneswar and Cuttack.
| Challenge | Impact | Mitigation Strategy with Green Permits |
|---|---|---|
| Multi-agency approvals | Delays in coordination between Transport Dept, SPCB, Industries | End-to-end application tracking via Green Permits Dashboard |
| Land acquisition and zoning | Difficulty in urban limits | Identification of industrial clusters and liaison with GIDC/MSME corps |
| Waste segregation technology | High CAPEX for shredders and depollution | Vendor tie-ups with CPCB-approved equipment suppliers |
| Skilled manpower | Limited trained technicians | Training modules on EHS and RVSF operations curated by Green Permits |
Did you know? A medium-scale RVSF handling 6,000 cars per year can recover about 7,500 tonnes of steel and aluminum—worth over ₹30 crore in the secondary market.
The Vehicle Scrappage Policy is more than a regulatory mandate—it’s the blueprint for a cleaner, circular automotive economy. With transparent digital licensing, policy backing, and rising demand, the window of opportunity is wide open.
Whether you’re an MSME entrepreneur exploring recycling, or a corporate investor seeking an ESG-aligned business, Green Permits makes the process effortless—from feasibility to registration to compliance management.
Get professional guidance, fast-tracked approvals, and end-to-end compliance from India’s trusted environmental consulting partner.
📞 +91 78350 06182
📧 wecare@greenpermits.in
🌐 www.greenpermits.in
→ Book a Consultation with Green Permits and start your scrappage plant journey today!
An RVSF is a government-authorized plant approved by MoRTH to dismantle and recycle end-of-life vehicles in a safe, eco-friendly manner.
You can apply online through the National Single Window System (NSWS) under MoRTH’s Vehicle Scrapping Facility section with all required documents and SPCB consents.
A minimum of 5 to 10 acres is recommended, depending on the expected vehicle inflow and dismantling capacity.
Key approvals include Consent to Establish (CTE), Consent to Operate (CTO), and RVSF Registration Certificate from MoRTH, along with a Fire NOC and layout compliance.
Typically between ₹3 crore to ₹8 crore, covering land, infrastructure, machinery, and regulatory clearances.