Central Government Expands Eligibility Criteria for Establishing Vehicle Scrapping Facilities

The Ministry of Road Transport and Highways notified the Motor Vehicles (Registration and Functions of Vehicle Scrapping Facility) Amendment Rules, 2025, on September 19, 2025. This legislative instrument was issued in exercise of the powers conferred by sub section (4) of section 59 and clause (p) of section 64 of the Motor Vehicles Act, 1988. The notification followed a mandatory public consultation phase a standard requirement for delegated legislation (laws made by the executive branch under parliamentary authority) which began on August 13, 2025. During this period, the draft rules were published in the Official Gazette (the public journal used by the government to publish statutory notices) to solicit feedback from stakeholders. As the government received no objections or suggestions within the stipulated thirty day window, the final rules were promulgated and came into force immediately upon their publication.

The amendment specifically modifies Rule 5 of the principal Motor Vehicles (Registration and Functions of Vehicle Scrapping Facility) Rules, 2021, which sets out the eligibility criteria for entities seeking to establish and operate scrapping facilities. By amending clause (a) of the said rule, the government significantly broadened the categories of organizations permitted to participate in the vehicle scrapping ecosystem. The legislation provided: “(including recyclers for ship breaking and recycling, plastic recycling and others)” as an essential addition to the existing list of eligible entities, which previously included any person, firm, society, or company. This change effectively integrates specialized industrial recycling sectors into the national framework for managing end of life vehicles (vehicles that have reached the end of their functional or legal life).

The policy rationale behind this amendment is to address statutory limitations that may have previously hindered the cross utilization of industrial recycling infrastructure. By explicitly including ship breaking and plastic recycling units, the government intends to leverage existing industrial capacity to enhance the efficiency of the vehicle scrapping process. This integration is expected to facilitate the professional dismantling of vehicles and the recovery of high value materials, such as metallic scrap and polymers, by involving established players from related recycling industries.

Prior to this amendment, the 2021 Rules provided a general framework for the registration and functions of scrapping facilities, but the lack of specific mention for specialized recyclers created a potential gap in the statutory framework regarding the eligibility of diverse industrial units. The new rules address this by ensuring that specialized recyclers can formally apply for registration as authorized facilities. The enforcement of these provisions remains consistent with the standards established in the principal rules of 2021, which were last amended in March 2024. This legislative update reflects the government’s ongoing efforts to streamline the circular economy within the automotive sector while maintaining rigorous regulatory oversight over the scrapping and recycling of motor vehicles across the country.

Keywords: Motor Vehicles Act, Vehicle Scrapping Rules 2025, MoRTH Notification, Ship Breaking Recyclers, Plastic Recycling, Vehicle Scrapping Facility, Statutory Amendment, India Recycling Laws

Geo Tags: India
District: Not Applicable